'Greedflation' named word of the year, but economists are sceptical
"Graaiflatie", Dutch for "greedflation", has been chosen by Flemish voters as the word of the year in a poll organised by dictionary publisher Van Dale and public broadcaster VRT. Economists, however, doubt the validity of the word, saying the phenomenon - profiting from high inflation by raising prices disproportionately - is "not widespread".
According to Van Dale, "graaiflatie" is inflation fuelled by companies such as supermarkets that pass on all or excess costs to consumers in order to maintain or increase their profits. The word comes from the English "greedflation" and was also voted word of the year in the Netherlands.
Paul De Grauwe, professor at the London School of Economics, said in May that "greedflation is responsible for two-thirds of price increases", De Standaard reports in response to Tuesday's announcement of the word of the year. According to De Grauwe, such behaviour is "rooted in the capitalist system" in which companies always seek to make as much profit as possible. The European Central Bank and the International Monetary Fund have warned against the phenomenon.
'No widespread evidence'
However, the National Bank of Belgium reported at the end of June that a recent study "did not reveal widespread evidence that the price increases observed in 2022 were driven by an opportunistic increase in profit margins". On the contrary, profits were falling in most sectors, it said. One explanation could be wage indexation, which meant that higher wage costs reduced profit margins.
Despite these conclusions, 36.7 per cent of voters proclaimed "graaiflatie" the word of the year. Van Dale had drawn up a shortlist of 10 words based on submissions throughout the year. Other contenders included bully boss, doughnut fusion (municipalities merging with smaller towns around them), screen apnoea and Tiktok justice.
© BELGA PHOTO SISKA GREMMELPREZ