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8 Nov, 2013 14:39

Deflated: Prices in Greece at a 50-year low

Deflated: Prices in Greece at a 50-year low

Prices of goods in Greece, from milk and bread to medicine have fallen by 2.0 percent in October, and are now at their lowest since 1962. Only the price of alcohol and tobacco increased in the last year.

Consumer prices in Greece plummeted 2.0 percent year-on-year in October 2013, according to a report by Greece’s Hellenic Statistical Authority on Friday.

In its sixth year of deep recession, unemployment and wage cuts have eroded demand and pushed prices to fifty year lows. Greeks are nearly 40 percent poorer than 5 years ago, with disposable incomes down by a third since the country fell into recession.

Consumer price indexes are used to monitor what is happening to the cost and standard of living for the average person.

Since 2012, the price of education dropped 4.24 percent, the cost of communication fell 4.2 percent, prices for transport decreased 3.5 percent, recreation and culture prices were down 3.0 percent, and household prices deflated 2.3 percent. Clothing and footwear prices fell 1.1 percent, as did healthcare.

image from www.statistics.gr

The only thing that became more expensive in Greece over the year was alcohol and tobacco products, products which prices inflated 3.5 percent year-on-year in October.

Greece’s inflation is well below the euro zone average, according to the International Monetary Fund.

Thursday figures showed October inflation among the 28-member EU down 0.7 year-on-year from the October reading of 1.1 percent, which was the lowest since November 2009. Such a shock slump drove the EU even further from the targeted 2 percent inflation and pushed the European Central Bank to cut interests rate to a new record low of 0.25 percent.

Greece has received $324 billion (240 billion euros) in financial aid, and Athens is set to receive its next loan installment of $1.35 billion (1 billion euro), which is conditional, it continues the IMF and European Union’s path of deep spending cuts and tax hikes.

Austerity and IMF debt have squeezed the indebted Greek economy into the ground. The economy is so far in debt to its lenders, it has to dismember and sell off state assets in order to reduce costs and raise money.