Greece’s inflation rate climbed to 3.3% year-on-year in May, up from 2.6% in April, as consumer costs continued to impact households throughout the country. The increase was mirrored in both headline and harmonized Eurozone measures, reinforcing inflationary trends across key categories including food, non-alcoholic beverages, and housing.
According to preliminary data, consumer prices advanced 0.4% from April to May. The cost of basic necessities remains a driver—food and non-alcoholic beverages showed a 3.1% increase, while housing prices surged by 8.0%. These sectors continue to exert pressure on inflation, mitigating some relief provided by moderating energy prices.
On the EU-harmonized measure, Greece’s inflation increase follows similar shifts across euro-area economies, with the harmonized index rising to 3.3%—notably higher than the euro-area average of around 1.9%. Core inflation—which excludes volatile energy and food—also remains elevated, highlighting persistent domestic price pressures.
Despite inflation’s uptick, the broader Greek economy is demonstrating resilience. The OECD anticipates GDP growth of around 2% in 2025 and 2.1% in 2026, supported by EU recovery funds and boosting of minimum wages. Structural support, such as substantial primary surpluses, enhances fiscal flexibility. However, the inflation challenge poses dilemmas for monetary policy and household budgets, particularly among lower-income groups already grappling with rising living costs.
For Greek households, the inflation climb signals a slowdown in the real purchasing power of wages, especially affecting essential goods and housing. This financial tightening may dampen consumer spending, potentially weakening economic momentum. At the same time, businesses are navigating increased input costs that could impact margins and investment plans.
Looking ahead, analysts expect inflation to gradually decelerate toward the European Central Bank’s 2% target by mid-to-late 2026. Factors contributing to this outlook include anticipated improvements in energy prices, normalization of supply disruptions, and moderate wage growth. Still, external risks—such as geopolitical tensions, commodity price shocks, or shifts in global supply chains—could derail this path. Any persistent inflationary surprise might prompt tighter monetary responses from the ECB.
Greece’s May inflation increase is consistent with broader euro-area inflation dynamics and reflects sector-specific pressures. While it challenges consumer finances and business planning, policymakers appear equipped with macroeconomic buffers and resilience. The critical balance will involve reconciling short-term inflation containment with longer-term growth objectives. Continued monitoring of inflation trends, wage dynamics, and consumer behavior will be essential for navigating policy decisions and economic wellbeing.