2024-08-11 03:05:46
Resurgence of inflation in July, due to “tourist package” and services, while the effects of the sudden rise in the price of natural gas and electricity are already being felt in retail.
OR +2.7% change recorded for the month of July -a rate higher by 0.4% compared to +2.3% in June- does not call into question the goal of further de-escalation of the average inflation for the whole year below the level of 3%. However, the data of the previous month show that new inflationary “fronts” are opening, which are located in the energy market (due to price increases in electricity and natural gas), in the provision of services (where the increases in tickets and insurance are the main characters), but also in the tourism package, obviously also due to seasonality.
Monthly changes
If one focuses on the individual changes recorded in July compared to June, one will find that there are significant appreciations in a number of products in the food sector.
We had an increase of 6% in cereals, 2% in pork, 3.6% in fresh fish, 2.1% in milk and 2.5% in yogurt, while vegetables increased by 6%. There were also declines (11.1% in fresh fruit, around 1% in lamb and goat and 2.5% in vegetables), but not enough to prevent a partial rise in the food index, which closed at 2 .4%, from 2.1% in June.
But the notable takeaway from July’s billings wasn’t just about food. From one month to the next, I had 9.5% increases in electricity bills (due to the well-known increases in wholesale electricity prices), 7.3% increases in air tickets and 3.5% in the basic tourist package that includes hotels, motels and inns.
Overall, July ended with a decrease in the rate of change of prices by 0.7% compared to June. However, this is due to the start of the offers. Based on the calculations, the summer sales have worked negatively for inflation at a rate of 1.38%. However, the dynamic that is developing again in services and in some food categories as well as in the “energy package” creates an image of concern regarding the course of prices from now on.
Annual comparison
In the list of products and services that showed the largest price increases during July compared to the corresponding month of 2023, the “protagonist” of recent months appears in first place, which is of course olive oil.
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The percentage of increase for the previous month is 56.7%. In the second place with the biggest increases, natural gas is now found, a “front” that will apparently remain open in August as well, given that the price on the Amsterdam stock exchange has climbed to the level of 40 euros.
The price of natural gas exceeded 40 euros/MWh – Obvious concern in the global markets
The annual rate of increase in airline tickets was measured at 18.4%, while increases in health insurance premiums now stand at 14% compared to last year. The 5th place is completed by the hotel fee with 12.6%. The list with the biggest year-on-year declines includes fresh fruit (-9.2%), flour and other cereals (-8.9%), other edible oils (at -8.5%) and potatoes (-6.1%).
At the level of sectoral indicators, the following individual changes were recorded:
- +2.4% in the group food and non-alcoholic beverages, due to price increases in: bread, breakfast cereals, meats, fresh fish, olive oil, fresh vegetables, preserved or processed vegetables, sugar-chocolate-sweets-ice cream, mineral water -soft drinks-fruit juices. Part of this increase was offset by the decrease in prices in: flour and other cereals, dairy and eggs, other edible oils, fresh fruit, potatoes, other food.
- +0.8% in the group alcoholic beverages and tobacco, due to an increase in prices of alcoholic beverages (not served).
- +4.3% in the clothing and footwear group, due to price increases in clothing and footwear.
- +2.4% in the housing group, due to price increases in: house rents, house repair and maintenance, natural gas, heating oil. Part of this increase was compensated by the reduction of prices mainly in municipal fees, electricity. On an annual basis, electricity costs 1.8% less than last year but, due to price increases and August, it is expected that this negative percentage will not be present at least in the current month’s figures.
- +1.9% in the Health group, mainly due to price increases in: pharmaceutical products, medical-dental and paramedical services, hospital care.
- +3.5% in the Transportation group, due to price increases in: new cars, auto parts and accessories, fuel and lubricants, maintenance and repair of personal transportation equipment, other services related to personal transportation, air passenger tickets. Part of this increase was offset by the decrease in prices mainly in used cars.
- +1.7% in the Leisure Cultural activities group, due to price increases mainly in: information processing equipment, small leisure items-flowers pets, entertainment and cultural services, newspapers-books and stationery, package holidays. Part of the increase was offset by a decrease in prices, mainly in audio and video processing equipment.
- +3.5% in the Education group, mainly due to price increases in: pre-school and primary education fees, secondary education fees, tertiary education fees.
- +6.7% in the Hotels Cafes-Restaurants group, due to price increases in: restaurants-patisseries-cafes-canteens, hotels-motels-inns.
- +2.0% in the Goods and Services group, due to price increases in: hair salons and personal care stores, other personal items, health insurance premiums, vehicle insurance premiums. Part of this increase was offset by price reductions in other personal care items.
- -0.2% in the group Durable goods Household goods and services, due mainly to a decrease in prices of household items of direct consumption. Part of this decrease was offset by the increase in prices in household services.
- -0.3% in the communications group, due to a price reduction in telephone services.