The Rise of Greedflation: How Corporate Profits are Driving Inflation in 2023

Greedflation is a term that will likely be on the tip of everyone’s tongue in 2023 as concerns continue to mount over businesses causing inflation by increasing their prices under the guise of other inflationary forces. While post-pandemic demand, supply shortages, energy market disruption, and issues with supply chains have played a role in rising prices, a growing concern is that excessive profits by some companies are contributing to spiraling costs. According to economists at the European Central Bank and Goldman Sachs, corporations are driving over half of the eurozone’s inflation rate, and companies are making higher profits at a time of economic malaise. While the rate of inflation in Ireland has fallen slightly, prices for essential items like milk and butter have increased by over 50% since the autumn of 2021, impacting households, especially those on lower incomes. As prices continue to stay high, some are calling for an investigation into potential price gouging by Irish supermarkets. The absence of any price collusion means that the Competition and Consumer Protection Commission is unlikely to get involved, leaving consumers feeling like they have little recourse. However, as some retailers start to lower their prices in response to lower input costs, cautious optimism remains as consumers face significant uncertainty and financial strain due to the cost of living crisis.