Greece is in fourth place among 25 countries of the European Union in terms of the effect of business profits on inflation, according to the analysis of the Competition Commission.
Ireland ranks first, followed by Romania and Slovakia. The increase in prices and consequently inflation was “fueled” by the so-called “greedflation.”
The EU has expressed concern over the phenomenon, while the Competition Commission and the financial staff are thoroughly monitoring it.
It should be noted that despite the de-escalation of the general index over the last months, the sub-index of the food category is consistently at a double-digit rate, burdening family budgets.
According to Athanasios Stavrakoudis, an expert of the independent authority, many other relevant studies have confirmed the close relationship between the GDP deflator and inflation. So it makes perfect sense to look at the impact of these three factors (work, profit, tax) on inflation.
If one looks at the most recent figures (first quarter of 2023) one will easily see the significant role of unit profit to the deflator and consequently to inflation.
From time to time other factors (unit tax and/or labor costs) affect the GDP deflator and consequently inflation.
However, the participation of the unit profit in the increase of the deflator is eent over the last period.
It is worth noting that there are significant differences from country to country in the level of the contribution of the three factors (labor, profit, tax) to the GDP deflator.
