Fear mounts over cost-of-living hike amid escalation of hostilities in middle east

Fears are mounting on Friday that the cost of essential goods, which started rising even before the termination of VAT relief measures, will be catapulted even higher, in the event of Israel striking Iranian oil facilities in the midst of an escalation of the middle east conflict.

Household essentials are in fact rising at three times the rate of inflation, Philenews reported,while European Central Bank President Christine Lagarde, warned of an expected an increase in inflation in the Eurozone during the last months of 2024.

An important factor for the consideration of consumers is that of the bigger picture-how much the prices of basic goods have shot up over the past four years, when prices across the board were significantly lower. Falling inflation and prices returning to pre-inflation levels are not to be confounded.

In four years, the general costs of goods increased by almost one fifth (18.5 per cent) and food by almost a quarter (24.1 per cent). The cost of potatoes has tripled (up by 197.4 per cent), while the cost of olive oil and electricity has doubled (94.9 per cent and 111.3 per cent).

Compared to September 2020, the price of bread increased by 19.4 per cent, lamb by 50 per cent, while heating and transport fuels rose by close to one third (32.3 per cent and 30 per cent).

Analysts estimate that price hikes have become entrenched and are set to remain at these high levels.

Between July and August, basic food items, in particular vegetables and fruits, saw further significant hikes, jumping by 25 per cent.

The national statistics office on Thursday showed that the food price index- a measure of the monthly change in a basket of food commodities- rose by close to four per cent in September, compared to September 2023.

The consumers’ association in its data analysis gave a detailed breakdown of the rising costs, showing that the cost of potatoes shot up by close to a fifth (23.3 per cent) in August. Other vegetables and meats saw more moderate rises between one and six per cent, compared to August.

However, if the comparison is made on an annual basis, some foods (which had been granted a zero VAT relief measure until end of September) have risen by as much as 60 percent, notably olive oil (61.3 per cent and potatoes 57.7 per cent). Vegetables prices rose by 17.6 per cent, lamb and goat meat by 8.5 per cent, mineral waters, soft drinks and juices by 5.2 per cent, and bread and rice by 1.6 per cent.

The price of fresh whole milk remained unchanged since last years, while other milks saw small drops.

Margarine and other vegetable oil prices also decreased by around 10 per cent and poultry by close to nine per cent.

The price of electricity decreased by close to three per cent, compared with last year, but as of November the graduated state subsidy will come to an end with the price expected to rise once more.

Cost of diesel and gasoline fell by 13.5 per cent and 11.9 per cent respectively.