Rising Energy Prices Drag Inflation In The EU

The increase in energy prices derived from the cost of gas and the impact of the Russian war in Ukraine continues to drag inflation in the European Union to maximum levels after reaching a level of 7.5% in March, almost two points more than in the previous month.

Preliminary data published this Friday by the Eurostat community statistics office once again point to energy as the main factor in the increase in prices, with an expansion of 44.7% compared to the same month of the previous year.

This rise represents a significant acceleration with respect to February, a month that has not yet reflected the effects of the war and in which the increase in the price of energy was ten points lower (32%).

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But energy is accompanied by increases in other product categories, such as food, alcohol and tobacco, whose price taken together increased by 5% in March, from 4.2% that had been observed a month earlier.

Within this group, unprocessed foods stand out, with an annual price growth of 7.8%, despite the fact that in November of last year it barely reached 2.5%.

Non-energy industrial goods and services, for their part, also contributed to the rise in the general level of prices, but with more moderate increases (3.4% in the first case and 2.7% in the second).

Although core inflation -which does not take energy and food into account because they are more volatile- stood at 3% in March, the data increases the pressure on the European Central Bank (ECB), which has the mandate to maintain the increase in prices around 2% in the medium term.

The president of the institution, Christine Lagarde, highlighted this Wednesday at a conference organized by the Central Bank of Cyprus that, since June, energy and food explain “around two thirds of inflation” in the euro zone.

The French company sees, in particular, three factors that will continue to push inflation up and the first is precisely energy, whose prices “are expected to be higher for longer”, with gas 52% more expensive and oil a 64% since the beginning of the year.

The second factor is the “pressure” on food prices, since Russia and Ukraine together represent 30% of global wheat exports, according to Lagarde, for whom the third explanation for high prices these months is that the supply problems in some sectors.

With regard to the breakdown by euro partners of the data offered by Eurostat this Friday, Lithuania is the country with the highest inflation, 15.6%, and together with Estonia (14.8%), the Netherlands (11.9%) and Latvia ( 11.2%) forms the group of four euro partners with double-digit annual price growth.

Behind are Spain (9.8%), Slovakia (9.5%), Belgium (9.3%), Greece, (8%), Luxembourg (7.9%) or Germany (7.6%), all of them with data above the average of the euro zone.

Below the average of the Nineteen are Italy (7%), Ireland (6.9%), Austria (6.7%), Cyprus (6.2%) and Slovenia (6%).

Finally, the euro countries that recorded the lowest increase in inflation in March were Finland (5.6%), Portugal (5.5%), France (5.1%) and Malta (4.6%).

Reliable, trustworthy and easy. Multimedia news agency in Spanish.

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