Greece’s economic team is preparing a fresh set of support measures as renewed pressure from global energy markets threatens to push inflation higher and erode household purchasing power.
According to the latest Eurostat data, inflation reached 3.9% in April, while national estimates suggest it may now exceed 4%, as rising fuel costs begin to filter through the broader economy.
At the center of government concern is the recent surge in international oil prices. Brent crude remains close to $100 per barrel and has at times climbed as high as $126, significantly above the levels assumed in Greece’s medium-term fiscal planning, which was based on around $89 per barrel.
Energy Costs Drive New Policy Response
The government is now considering a new package of interventions aimed at limiting the impact of higher energy prices on consumers. The measures are expected to be announced soon, with implementation targeted for June.
A key element of the plan is a €200 million contingency reserve set aside for emergency support. Additional unused funds from previous fuel subsidy programs may also be redirected to strengthen the package.
Among the options under review are an extension of diesel fuel subsidies for June, a possible two-month extension of fuel support payments during the summer, and the reintroduction of broader household assistance if inflationary pressures continue to intensify.
Risk of Wider Price Spillover
Officials are increasingly concerned that rising energy costs could spread across the economy, affecting transport, food prices, services, and supply chains. This could trigger a new inflationary cycle, further reducing real incomes and household spending power.
The challenge for policymakers is balancing immediate relief with long-term fiscal discipline, as higher inflation also risks undermining broader economic stability.
Budget Plans Under Pressure Ahead of Autumn
At the same time, the finance ministry is reassessing planned fiscal space ahead of the annual policy announcements scheduled for the autumn in Thessaloniki. Potential tax cuts and income support measures are being reviewed in light of higher energy costs and their impact on the budget surplus targets.
The scale of any future measures will depend on how long energy prices remain elevated and how significantly they affect economic growth projections.
European Context Adds to Uncertainty
The issue was also discussed at a recent meeting of eurozone finance ministers, where concerns were raised about the broader impact of prolonged energy price volatility on growth across Europe. Some forecasts now suggest the risk of economic slowdown if high prices persist.
