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Morgan Stanley’s report on Greece’s prospects highlights the risks to the economy from the sharp increase in rents recorded in recent years, which continues despite the general decline in inflation.
Although inflation in Greece has moderated, the US bank estimates it will land at 2.1% this year, from 2.7% in 2024, and there are areas where inflation continues to rise.
Rent inflation continues to increase sharply, having reached 10.5%, compared to just 2.9% in the eurozone.
As Morgan Stanley points out, approximately 35% of households in Greece rent a house, with lower-income households spending at least 22% of their disposable income on rent.
Therefore, a large increase in rent could hit the disposable income of poorer households, potentially posing a threat to real consumption.