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According to a study from the National Bank of Greece on inflation and short-term economic challenges, olive oil alone accounts for almost half of the country’s food inflation.
Food inflation is the rate of increase in food prices, usually measured by the Consumer Price Index (CPI), which calculates the monthly changes in consumer prices based on a representative basket of goods.
The study said food inflation is slowing down in Greece but remains high, reaching 5.4 percent in April compared with the same month one year ago. This is due to the outsized impact of olive oil in the CPI and the adverse weather that heavily impacted the crops in central Greece last September.
See Also:Farmers in Greece Witness the Impacts of Climate Change After Historically Low HarvestBy comparison, the annual food inflation in the rest of the Eurozone countries stood at 2.2 percent in April 2024.
However, if the weighing of olive oil in the Greek CPI were ignored, food inflation in the country would then total 2.6 percent, the study noted.
“The average price of olive oil increased by 29.4 percent per annum in 2023 and by 63.7 percent in April 2024, adding 0.5 percentage points to overall inflation and accounting for almost 50 percent of the increase in total food inflation over the same period,” the bank’s analysts wrote.
According to standard practice, olive oil accounts for 0.9 percent of food price rises in Greece due to its high penetration in Greek households, compared to 0.2 percent in the rest of the Eurozone countries.
Some market analysts, however, argued that olive oil’s actual weight in the Greek price index is lower than officially accepted, considering the change in consumer behavior caused by the record-high prices of olive oil on supermarket shelves.
In confirmation, industry experts have said consumers in Greece have started to opt for vegetable oils instead of olive oil as their main cooking oil due to record prices.
“Greek consumers have reduced their consumption of olive oil by up to 40 percent due to the high prices and have turned to other oils, such as seed oil,” said Manolis Giannoulis, the head of EDOE, the national interprofessional olive oil association.
“We still have a long way to go before things get back to normal,” he added.
Greece historically ranks among the world’s top olive oil-consuming nations, with a per capita annual consumption of around 12 liters.
Meanwhile, the Greek government and the parliamentary opposition have also argued about the effect of olive oil prices on food inflation.
Both the center-right New Democracy ruling party and the left-wing Syriza opposition have pointed to inaccurate figures – olive oil being responsible for a 22 percent and 4.27 percent rise in food prices, respectively – that are a far cry from the recorded 50 percent, accusing each other of misinforming the public at a time when Greeks are grappling with the rising food costs in the country.
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