The Greek economy is entering a phase of tension and uncertainty, as recent developments create an explosive mix testing the resilience of households and businesses. The simultaneous rise in inflation, the removal of the profit margin cap, and worsening expectations from both consumers and enterprises are shaping an environment marked by high costs and suffocating pressure — one that does not inspire optimism for Greece’s economic future, especially given the fluid international situation.
According to Eurostat data, annual inflation in Greece reached 3.6% in June—up from 3.3% in May—remaining consistently above the European Union average. This places Greece among the highest inflation performers in the EU, while the eurozone recorded inflation at 2%. Furthermore, as of July 1st, the cap on gross profit margins, which had been in place since 2021 to prevent exploitative price hikes on essential goods, fuels, and energy, was lifted. This move has raised concerns during a period where inflationary pressures have not eased but intensified—and are expected to rise further with increased demand during the peak tourist season.
This volatile situation is confirmed by the latest Economic Survey conducted by IOBE for June. The economic climate index dropped to 106.1 points—the lowest level in ten months—mainly due to weakened business expectations and declining consumer confidence. Inflation expectations are rising across multiple sectors: in retail trade, the relevant balance jumped from +40 to +55 points, while it remains consistently high in construction activity. Notably, 64% of consumers believe prices will continue to rise over the next 12 months.
While the economic climate index is a “psychological” indicator, it reflects actual intentions regarding consumption, hiring, and investment decisions in the near term. As such, it serves as a barometer for the real economy.
Thus, the economic team faces a paradoxical reality: on one hand, macroeconomic indicators—based on employment figures, growth, and tourism—remain positive. On the other, citizens’ daily lives are increasingly burdened by rising living costs, loss of purchasing power, and the perception that upcoming months will bring further financial strain.
The coming two months are crucial, as a drop in demand and private consumption, combined with potential geopolitical tensions or escalation in trade wars, could impact public revenues—especially ahead of announcements expected at the Thessaloniki International Fair in September. Currently, the removal of the profit margin cap only accelerates these anxieties. If prices for basic goods begin to rise again in July, the financial pressure on households and companies will intensify further.
Citizens’ expectations regarding the country’s economic situation are already largely negative: 61% foresee deterioration, compared to just 6% who anticipate improvement.