Macro roundup: Core outpaces headline inflation

Greek price increases driven mostly by goods as services inflation plunges

Mar 17, 2023

Greece’s inflation rate continued its sharp decline in February, dropping to 6.1 percent from 7 percent in January.

At the same time, core inflation — which strips out the volatile elements of energy and food — continued to march up, rising to 6.6 percent from 6 percent the month before. That led the core inflation above the headline rate for the first time since March 2021.

Price increases in Greece are being driven by goods inflation, with services inflation falling like a stone in recent months. In February, the annual rate of increase in the price of services was 0.3 percent, compared with 1.4 percent the month before — and down from a high of 9.7 percent in April of last year.

Although goods inflation is down from its high of 15.8 percent in September, it remains in double digits, dropping to 10.2 percent in February from 10.9 percent the month before.

Cyprus anniversary

This week has marked 10 years since a fateful meeting of euro-area finance ministers decided that a bailout for Cyprus would also mean “bailing in’ depositors at the country’s two biggest banks.

With a bank crisis once more in the news, the chance to write something to mark the occasion was too good to ignore. In a two-part series, I wrote a bit about what happened then, and noted a few parallels with the Silicon Valley Bank collapse:

Grecology

Europe's forgotten bank crisis

This is part one in a two-part series to mark this anniversary. The second part is a guest post by Dr Alexander Apostolides, an economic historian and fintech researcher, on the legacy of the crisis in Cyprus, which you can read here…

6 months ago · 6 likes · Marcus Bensasson

Then for part two, Dr Alexander Apostolides wrote a guest post on the view from Nicosia and lessons we can learn from the crisis:

Grecology

Four lessons from Cyprus's financial crisis

This guest post by Dr Alexander Apostolides is part two in a two-part series on the 10-year anniversary on the Cypriot bailout. You can read part one here…

6 months ago · 4 likes · Alexander Apostolides

Other data

The central government achieved a primary budget surplus of 4.2 billion euros in the first two months of 2023, compared with a target of 1.82 billion euros.

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Next week’s key releases

Thursday, March 23:

January balance of payments (Bank of Greece)

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