Deflated: Prices in Greece at a 50-year low
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.
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.