In a recent announcement, Finance Minister Makis Keravnos has confirmed a 2.44% increase in the Cost of Living Allowance (CoLA) for employees in both the public and private sectors. The adjustment, effective from this month, is tied to the consumer price index (CPI) and will remain in effect until the end of the year. The move follows a decrease in the inflation rate to 3.5% in 2023, a significant drop from the 8.4% reported at the close of 2022, as per the state's Statistics Department.
Notably, last January, CoLA recipients initially received 50% of their entitlement, but after negotiations between unions and the government, this figure was raised to 66.7% during the summer. Consequently, individuals will now experience a 2.44% wage increase despite the cost-of-living index rising by 3.5%.
The Consumer Price Index witnessed a decline from 1.7% in November to 1.6% in December, marking a considerable contrast to the 7.9% recorded in December 2022. The overall CPI increase for 2023 settled at 3.5%, showcasing a notable reduction from the 8.4% observed in 2022, indicative of a gradual control over the inflation rate.
Data from StatWatch highlights substantial shifts in prices, with petroleum products experiencing a 7.2% and 5.3% decrease in November and December 2023, respectively. Noteworthy is the remarkable change in the restaurants and hotels category, which displayed a 5.4% increase compared to both December 2022 and the preceding month.
These developments underscore the dynamic economic landscape, with the government's efforts to align wage adjustments with the CPI reflecting a strategic move to navigate the impact of inflation on workers in both public and private sectors. The decline in the inflation rate and fluctuations in various sectors indicate the ongoing efforts to stabilize and manage economic factors for the benefit of the workforce.
By fLEXI tEAM