ATHENS- Greece will hand out one-off grants to low-income pensioners and medical staff ahead of Christmas to shield them from higher energy and food prices, Prime Minister Kyriakos Mitsotakis said on Monday.

Consumer inflation hit a multi-year high of 3.4% in October with costs in the housing sector rising by an annual 7.8%, mainly due to rising electricity, heating oil and natural gas prices. 

The government has already spent about 700 million euros ($790 million)on subsidies for the majority of Greek households to make energy costs more affordable. It also lowered VAT for farmers and animal breeders.

Mitsotakis said 800,000 pensioners on low incomes and 173,000 disabled people would each get a one-off handout of 250 euros before the end of the year.

"We are responding to the short-term rise in prices without putting the fiscal balance at risk," Mitsotakis said during a parliamentary debate on recent price increases.

He said inflation should start to decline from the first quarter of 2022.

A Finance Ministry official told Reuters that the total cost of the new measures will be about 300 million euros, easily covered by the budget.

Greece expects its economy to grow 4.5% in 2022 after a jump of 6.9% this year, due to higher tourist intake and pent-up demand. 

Mitsotakis said about 100.000 medical staff in the public sector will get a bonus of half a month's salary, or about 900 euros on average.

Greece joined several other European countries last week in imposing more restrictions on those unvaccinated against COVID-19 following a surge in infections.

($1 = 0.8871 euros)

(Reporting by Lefteris Papadimas; Editing by Nick Macfie) ((lefteris.papadimas@thomsonreuters.com; +30 210 3376477; Reuters Messaging: lefteris.papadimas.reuters.com@reuters.net))