Two questions persistently trouble Greek households: Why does inflation remain high in Greece even as it slows down across the Eurozone, and why do services cost so much? Categories like hospitality, accommodation, rents, and air travel—closely tied to Greece’s tourism industry—are key factors keeping inflation elevated, according to data from ELSTAT and the latest report by Bank of Greece Governor Yannis Stournaras. While services significantly impact inflation across the Eurozone, Greece ranks fourth among member states in this category. This surge is attributed to energy inflation peaks in May 2022, rising food prices, supply chain issues during the pandemic, and domestic factors. Specific service categories such as accommodation, dining services, airfare, and rents contribute heavily to inflation. Wage increases, particularly for minimum wage workers, higher energy costs, and strong tourist demand drive these price hikes. Looking ahead, forecasts indicate that inflation will remain high due to wage growth, indirect tax increases, and continued tourism demand. The general inflation rate is expected to ease slightly to 2.9% in 2025, while core inflation, largely driven by services, is projected to stay stable.
Why Greeks Pay More for Services Compared to Most Eurozone Countries
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