Eurozone inflation reached 7.5 percent in March 2022, the highest annual rate the currency bloc has recorded, and it beat what economists had predicted.
February’s figure was 5.9 percent. The European Central Bank treats 2 percent as the rate that keeps prices stable, so March came in at more than three times that.
Energy did most of the damage. Energy prices across the eurozone rose 44.7 percent, a jump tied to Russia’s invasion of Ukraine and the sanctions imposed on Moscow afterward. The European Union imports over 40 percent of its gas from Russia. Gas had so far been exempt from most sanctions, but the war still made its price swing hard.
Food costs rose as well, and the pain was uneven. The Baltic countries and the Netherlands all saw double-digit inflation, and Lithuania was worst at 15.6 percent. Malta had the lowest rate in the bloc, 4.6 percent, which is still more than twice the ECB’s target.
Core inflation, which strips out fuel and food, ran at 3.2 percent, up from 2.8 percent in February. That figure matters because it filters out the most volatile prices.
The numbers put the ECB in an awkward spot. It has to bring prices down without choking off growth in a region still recovering from the pandemic that began in 2020. Some economists have started to ask whether the eurozone will tip into recession during 2022.
Sources
- Eurozone Inflation Hits Record High in March at 7.5% as Energy and Food Prices Soar – KAOHOON INTERNATIONAL
- Eurozone Inflation Hits New High
