Inflation in Europe rose to a new record in June due to the impact of the war in Ukraine and Western sanctions on Moscow, which worries families now facing a sharp rise in food prices and higher energy prices.
The European Statistics Office “Eurostat” announced on Friday that inflation in 19 euros had reached 8.6% in June, 7.4% in April and 8.1% in May, the highest level ever recorded by Eurostat. Since the launch of the code in January 1997.
Consumer prices have risen monthly since November, after last year’s Govt.
Rising inflation was accompanied by the Russian invasion of Ukraine on February 24 and Western sanctions on Moscow, raising fears of a sharp decline in GDP growth.
“Europeans find it difficult to buy food,” said Philip Vector, economist at Ostrom Asset Management.
“We have never seen such a large number in history in terms of the share of food items, which will have a severe impact,” he told AFP, referring to rising prices of grains and oils used in manufactured goods.
With this component of the price index rising to 41.9 per cent year-on-year in June from 39.1 per cent in May, inflation is still primarily affecting the electricity, oil, gas and other energy sectors.
Factor expressed his concern about the great danger to the economy as families are forced to reduce their spending. “At one point, the consumer is forced to make a decision: he needs petrol to go to work, so he is deducted from other costs, which creates a negative shock to the process,” he said.
In May, Brussels cut its inflation forecast by 3.5 points to 6.1 percent, reducing its forecast for eurozone GDP growth by 1.3 points to 2.7 percent in 2022. On Ukraine.
The situation could worsen if Moscow decides to suspend gas exports to Europe altogether in response to Western sanctions.
“The outlook for the rest of the year remains bleak,” said Pushpin Singh, an economist with the Saber think tank.
Inflation in the euro area is 2% higher than the target set by the European Central Bank, and the financial institution is preparing to raise its interest rates in July for the first time in 11 years, leading to a further slowdown in growth.
These expectations exacerbated the risk of a debt crisis in the eurozone, with rising interest rates between northern and southern European countries needed to borrow and finance their deficits.
European Central Bank President Christine Lagarde announced on Tuesday that the company would go “to the required level” to combat inflation, which is expected to be “very high for a while”.
France was less affected than its European neighbors by 6.5% in June, the second lowest rate in the eurozone after Malta (6.1%), while inflation was 22% in Estonia, 20.5% in Lithuania and 19% in Latvia, trade with Russia and Moscow. Most vulnerable to the consequences of severing relationships.
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