Preliminary data from Eurostat for March show a further reduction in inflationary pressures in Greece, as well as in the Eurozone. in Greece every year inflation it amounted to 5.4% according to the first estimates against 6.5% in February, and in the euro area – 6.9 against 8.5%.

In particular, according to the Eurostat report, the biggest gains in the Eurozone continue to come from the prices of food, alcohol and tobacco: they rose by 15.4% year on year compared to 15% in February. This is followed by the cost of non-energy manufactured goods, up 6.6% from 6.8% in February, and services, up 5% from 4.8%.

On the contrary, energy costs decreased by 0.9% year on year against growth by 13.7% in February. Of course, it is worth noting that energy prices already started to rise in March 2022 after the Russian invasion of Ukraine.

euro area #inflation by 6.9% in March 2023 compared to 8.5% in February. Components: food, alcohol and tobacco +15.4%, other goods +6.6%, services +5.0%, energy -0.9% – preliminary estimate https://t.co/JanK9NcMzB pic.twitter.com/WzYZfXCEeM

— EU_Eurostat (@EU_Eurostat) March 31, 2023

It is worth noting that compared to the rest of the eurozone, Greece recorded the fifth lowest inflation rate in March after Luxembourg (3%), Spain (3.1%), the Netherlands (4.5%) and Belgium (4.9%).

Structural inflation is problematic

Despite a significant easing in overall price pressures, structural inflation, excluding the volatile food and energy sectors, reached a new record. In particular, structural inflation jumped to 5.9% in March, continuing the upward trend of recent months. It is significant that in February it was 5.6%.

This pattern of general price deflation and increased structural inflation is also observed separately in the largest countries of the bloc. Consequently, this has already begun to worry ECB officials.

The bank will now focus on steadily lowering core inflation “in line with our medium-term target,” ECB President Christine Lagarde recently said. Recall that the ECB’s inflation target is set at about 2%.

In this context, it is worth noting that before the last meeting of the ECB, there were disagreements about the pace of monetary tightening due to fears of a possible banking domino. But while fears in the international banking industry are subsiding, hawkish voices demanding further increases in borrowing costs are growing stronger.