Eurozone Inflation Accelerates To Record On Energy Prices
21 Aprile 2022 - 8:24AM
RTTF2
Eurozone inflation accelerated sharply, but less than initially
estimated, to set a record high in March underpinned by surging
energy prices, final data from Eurostat showed on Thursday.
Consumer price annual inflation jumped to 7.4 percent from 5.9
percent in February. Although the rate was revised down slightly
from the flash estimate of 7.5 percent, it was the strongest on
record.
Core inflation, which excludes prices of energy, food, alcohol
and tobacco, accelerated to 2.9 percent from 2.7 percent a month
ago. Core inflation was also revised down by 1 percentage point
from 3.0 percent.
The current inflation figure is more than triple the European
Central Bank target of 2.0 percent.
The ECB expects food and energy prices to keep climbing in the
months ahead. The central bank has projected inflation to stay
elevated for longer than earlier expected.
Headline inflation is expected to peak at over 8 percent and
average around 7 percent in the year as a whole, Jack
Allen-Reynolds, an economist at Capital Economics, said. As rising
inflation will put a dent in consumer spending, the year 2022 will
be a year of stagflation for the eurozone, the economist added.
Among the main components, energy prices showed the biggest
acceleration in March, up 44.7 percent versus 32.0 percent in
February.
Food, alcohol & tobacco prices rose 5.0 percent compared
with 4.2 percent in February.
Likewise, growth in non-energy industrial goods prices advanced
to 3.4 percent from 3.1 percent increase in February. Services
costs climbed 2.7 percent, also faster than the 2.5 percent gain in
the previous month.
Recent data suggest that inflationary pressures continue to keep
building in the euro area.
Official data showed this week that producer price inflation in
Germany, the biggest Eurozone economy, hit a record high in March
on the back of runaway energy prices. Prices rose 30.9 percent
year-on-year following a 25.9 percent increase in February.
Energy prices are expected to stay elevated as European
countries plan to reduce their dependence on Russian gas and
oil.
According to the Purchasing Managers' survey, conducted in
March, there were sustained increases in both input costs and
output prices, across eurozone, as firms sought to at least partly
share the burden of rising operating expenses with their clients.
In both cases, rates of inflation accelerated markedly to new
survey records.
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