According to a study by 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 monthly changes in consumer prices based on a representative basket of goods.
The study said food inflation is slowing in Greece but remains high, reaching 5.4 percent in April compared to the same month a year ago. This is due to the huge impact of olive oil on the CPI and the adverse weather that severely affected crops in central Greece last September.
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In comparison, annual food inflation in the rest of the eurozone countries stood at 2.2 percent in April 2024.
However, if the weight of olive oil in the Greek CPI is ignored, food inflation in the country would rise to 2.6 percent, the study notes.
“The average price of olive oil increased by 29.4 percent annually in 2023 and 63.7 percent in April 2024, adding 0.5 percentage points to headline inflation and accounting for almost 50 percent of the increase in total food inflation during the same period,” the bank said. the analysts wrote.
According to usual practice, olive oil accounts for 0.9 percent of the increase in food prices in Greece due to its high penetration into Greek households, compared to 0.2 percent in the rest of the eurozone countries. .
Some market analysts, however, argued that the real weight of olive oil in the Greek price index is lower than the officially accepted one, taking into account the change in consumer behavior caused by the record olive oil prices in the supermarket shelves.
In confirmation, industry experts have said that consumers in Greece have started opting for vegetable oils instead of olive oil as their main cooking oil due to record prices.
““Greek consumers have reduced their olive oil consumption by up to 40 percent due to high prices and have turned to other oils, such as seed oil,” said Manolis Giannoulis, director of EDOE, the national interprofessional oil association. made of olives.
““We still have a long way to go before everything returns to normal,” he added.
Greece is historically among the first countries in the world. olive oil consuming nations, with an annual per capita consumption of about 12 liters.
Meanwhile, the Greek government and parliamentary opposition have also argued over the effect of olive oil prices on food inflation.
Both the ruling center-right New Democracy party and the left-wing opposition Syriza have pointed to inaccurate figures (olive oil is responsible for a 22 percent and 4.27 percent increase in food prices, respectively) that are far off. of the 50 percent registered. , accusing each other of misinforming the public at a time when Greeks are grappling with rising food costs in the country.
