Inflation retreated to 2.7% in Apr-23
Annual CPI inflation retreated sharply to 2.7% in Apr-23 from a 5.3% inflation in previous month, mainly due to price reductions in transport and healthcare categories along with considerable deceleration in food prices. Core inflation (non-food, non-energy, and non-tobacco) reduced further to 4.7% (-0.3ppts m/m) in April. By categories, annual inflation was mostly driven by price changes in food and non-alcoholic beverages (+5.9% y/y, 2.04ppts), housing, water, electricity, gas and other fuels (+10.3% y/y, 1.05ppts), restaurants and hotels (+11.9% y/y, 0.45ppts), alcoholic beverages and tobacco (+6.7% y/y, 0.44ppts), transport (-12.9% y/y, -1.66ppts) and healthcare (-7.9% y/y, -0.78ppts) categories. On a monthly basis, there was a 0.7% deflation in Apr-23, driven by price reduction in food and non-alcoholic beverages (-2.1% y/y, -0.69ppts) and transport (-2.0% m/m, -0.23ppts) categories.
Given the substantial deceleration in inflation, we expect NBG to consider key rate cut on 10 May 2023 meeting, which is currently set at 11.0%.
International reserves at all-time high US$ 5.1bn in Apr-23
Gross international reserves increased by 34.2% y/y to an all-time high US$ 5.1bn in Apr-23, according to NBG. On a monthly basis, the reserves were up by 2.6% (+US$ 129.6mn). Changes in reserves were attributed to the government and banking sector FX operations, likely also to NBG’s FX purchases (information will be available on 25 May).
Tourism revenues stood at US$ 250mn in Apr-23
According to our estimates, tourism revenues continued strong growth up by 32.6% y/y, reaching US$ 250.0mn in Apr-23. Overall, tourism revenues reached US$ 1,045mn (+79.5% y/y) in 4M23, based on our estimate.
