Eurostat: Prices in the eurozone rose at the fastest rate in 25 years

2022-06-19 0 By

This article was transferred from;With inflation high, the euro zone’s ability to avoid recession in 2022 remains an open question.Consumer prices in the eurozone rose 7.5% in March from a year earlier, according to Eurostat, the European statistics agency, after rising 5.9% in February. That is the highest level since 1997.According to Les Echos, inflation in the eurozone has broken records every month since November 2021.Prices are now rising in almost all of the 19 countries in the eurozone, but they are largely driven by soaring fuel, gas and electricity costs.In particular, energy prices accelerated under the impact of international conflicts, rising 44.7 percent year-on-year in March after rising 32 percent in February;Food, tobacco and alcohol prices rose 5 per cent in March from a year earlier, after rising 4.2 per cent in February;Prices of industrial products rose 3.4 per cent in March from a year earlier, following 3.1 per cent in February.Service prices rose 2.7 per cent in March after rising 2.5 per cent year-on-year in February.Inflation is grim in many European countries.Inflation in the Netherlands and some Baltic countries is in double digits.After rising 3.6% year-on-year in February, France’s consumer-price index rose to 4.5% in March, the highest level since December 1985, according to Insee, the national institute for Statistics and Economic Research.While European governments have introduced purchasing power support measures in the face of soaring energy prices, it is uncertain whether this will be enough.Inflation is exacerbating Europe’s social crisis, with families increasingly struggling to make ends meet.Economists at Oxford Economics believe a sustained rise in prices will weigh on consumer spending, adding to concerns about the economic recovery.The recovery of economic activity in the post-pandemic period is clearly threatened by inflation, which will inevitably weaken the purchasing power of households. European households are suffering from low morale and a sharp decline in their willingness to consume.Europe’s economy rebounded very strongly at the end of 2021, but that trend is reversing, with AxA chief economist Gilles Moyck predicting that eurozone GDP could fall in the second and third quarters of 2022, especially as German manufacturing slows sharply.Inflation is a headache for the European Central Bank (BCE), which is charged with price stability, with annual inflation running well above its 2% target.According to Christine Lagarde, president of the European Central Bank, the outlook for the economy in the coming months is “quite uncertain” as international conflicts further fuel inflation, which will reduce the level of growth.(Overseas network – Paris – Rugia)