Based on the data provided by the International Organization, the burden of accuracy depends on the composition of the household of all those who are characterized as economically vulnerable. In general, the poorest households in the bottom three income deciles experience inflation 1.5% higher on average than middle and high income earners.
This is because most of the income of the lower economic strata is spent on food and utilities which have the biggest increases in the crisis. Middle and high income earners are burdened more with their transfers in times of high inflation.
However, even at low incomes there is “stratification” in terms of the burden of accuracy. Specifically, people who are at the end of their working life or just after retirement (i.e. those over 65) and have low incomes as well as the least educated (secondary graduates), experience inflation higher than average by 1.5% and 0.5% respectively.
On the other hand, poor households, which live in more sparsely populated areas, spend most of their income on food. This category experiences inflation increased by 0.5% compared to the national average, but also against the economically vulnerable, who live in large cities and densely populated areas, with more shops, where the competition is presumably stronger. Things are a little better for the economically vulnerable, with a second source of income (an allowance, a rent) since the decline in their purchasing power is smaller.
According to the Fund, Greece took the lead in providing support measures to mitigate the consequences of increases in energy prices and high inflation in general.
Regarding the support measures, the Fund notes that the aid in Greece is more “categorized” than targeted. He typically mentions the main measure against the energy crisis, the subsidization of electricity tariffs, which until the end was horizontal and independent of consumption. He notes that under this option the subsidies given were absorbed at a rate of 75% by middle and high incomes, for which there was no provision for a graduated subsidy to give an incentive to save energy.
With the same logic, he also criticizes the grant of the 10% subsidy on the purchase of food and other items of daily use, the well-known “Market Pass”, considering it a horizontal measure.
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