IMF: Greece – selected issues

Washington, D.C., 24 January 2024

The Greek government has provided substantial support to households and enterprises to cope with the high cost of living in 2022—2023. This paper leverages on the rich micro-level data on household consumption in Household Budget Survey to study the distributional impact of price increases. It finds that low-income households and households living in sparsely populated areas and/or relying more on secondary source of income (e.g., non-wage income) have faced higher loss of purchasing power, despite significant heterogeneity even within narrowly defined household groups. Policy simulations suggest that targeted support measures tailored to the recipients’ needs would effectively mitigate the vulnerable households’ income loss. Categorical programs that aim at a certain group of households without income criteria could also alleviate the cost-of-living pressures, but less effectively.