Inflation in Greece in the post-covid era
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Date
2025-09-29
Authors
Φονταλής, Βασίλειος
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Abstract
This dissertation investigates the inflationary episode in Greece during 2020-2024, a period marked by the COVID-19 pandemic, the energy crisis, and the war in Ukraine. These overlapping shocks created the steepest global surge in prices in decades, with particularly acute consequences for small, open economies such as Greece. The study seeks to disentangle the determinants of both headline and core inflation, distinguishing between supply- and demand-side influences and situating the Greek experience within the broader European and international context. The analysis demonstrates that Greek inflation was primarily supply driven with external shocks, especially soaring international energy and food prices, acting as the dominant forces. Greece’s structural dependence on imported energy amplified its vulnerability, while food inflation proved unusually persistent, surpassing headline inflation and disproportionately burdening lower-income households. Demand-side pressures, such as pent-up consumption following the pandemic lockdowns and government support programs, contributed to inflation mainly in 2021-2022 but proved less durable. Policy responses, including subsidies such as the Fuel Pass and Power Pass, provided temporary relief but were fiscally costly and ineffective in curbing underlying inflation. Moreover, evidence of widening profit margins in several sectors highlighted the role of imperfect competition and raised concerns about the contribution of profit-led dynamics to price persistence. Overall, the findings underscore that Greece’s inflationary surge was driven above all by global supply disruptions, with domestic structural weaknesses amplifying their impact. The dissertation concludes that achieving lasting price stability requires targeted support for vulnerable households, stronger regulatory oversight to prevent excess profits, and long-term reforms aimed at energy diversification, improved competitiveness, and enhanced economic resilience.
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Keywords
Inflation, Covid-19