Every month, you see an inflation rate in news headlines (for example, “Inflation in Greece reaches 5.6% in October”). And while you probably have a general idea of what inflation is, you may not fully understand what it means for you in practice.
It’s time to change that.
First, what exactly do we measure when we measure inflation?
According to the International Monetary Fund, inflation measures the rate at which prices rise over a given period.
This figure isn’t based on changes in the prices of individual products or services.
Instead, it is calculated using a representative basket of consumer goods and services, whose prices are tracked and compared through the Consumer Price Index (CPI).
Who decides what goes into this basket? The relevant statistical authority.
In Greece, that’s the Hellenic Statistical Authority (ELSTAT).
Since 2026, ELSTAT has monitored prices across 13 categories, also used by Eurostat:
You may have noticed that news headlines sometimes report different inflation rates based on the same ELSTAT release.
Why is that? Because ELSTAT calculates inflation by comparing the CPI over three different periods and publishes:
For example, September 2026 compared with August 2026 | +2.1%
For example, September 2026 compared with September 2025 | +5.0%
For example, October 2025–September 2026 compared with October 2024–September 2025 | +3.6%
Not necessarily. Whether inflation is a problem for an economy depends on how high it is, how long it lasts, what causes it and, most importantly, how it compares with changes in incomes, economic output and employment.
In fact, according to the European Central Bank, the most desirable inflation rate over the medium term isn’t zero, but a low, stable and predictable rate of around 2%.
Again, no. To understand what inflation means for an economy, we also need to consider other indicators, such as wage growth and unemployment.
For example, two economies can have the same inflation rate but very different economic conditions.
With annual inflation at 4%, an economy where wages rise by 6%, output is growing and unemployment is low would see an improvement in purchasing power.
By contrast, an economy where wages rise by just 1%, output is declining and unemployment is high presents a very different picture.
In Greece, inflation continues to absorb almost all nominal wage increases, leaving workers’ purchasing power largely unchanged.
According to the autumn report of the Hellenic Fiscal Council (HFC), real wages rose by 3.6% in 2024, but growth slowed to just 0.1% in 2025.
Key factors contributing to inflation in Greece include rising energy and food costs, as well as the housing crisis.
The 5.6% figure is Eurostat’s estimate of Greece’s annual inflation rate for October, compared with 4% for the euro area.
For energy specifically, the estimated inflation rate is 26.5% in Greece and 20.8% in the euro area.
ELSTAT’s official figures for October are expected to be released on Tuesday, November 10.
And if you’ve read this far, you’ll be better equipped to understand them.
