Inflation in the Eurozone in March reached a record high

Consumer price growth in 19 countries that use the common currency accelerated from 5.9% in February, when conflict in Ukraine and sanctions against Russia pushed fuel and gas prices to record highs.

Although energy is the main cause inflationary However, the price inflation of food, services and durable goods were all higher than the 2% target set by the European Central Bank (ECB). This shows that prices have increased rapidly on a large scale, not just because of the influence of oil prices.

Excluding energy and food prices, commodity prices have continued to rise sharply, raising the risk of persistently high inflation that is difficult to reverse. The estimated inflation index after separating food and energy prices has increased from 2.9% to 3.2%, while if alcohol and tobacco products are separated, inflation increased from 2.7 % to 3%.

The European Central Bank (ECB) is currently in a dilemma when it has to bring inflation back to 2%, but monetary tightening measures have the risk of negatively impacting economic growth. which is being affected by the conflict in Ukraine and the COVID-19 pandemic.

The ECB estimates that the Eurozone economy will record positive growth in the first quarter, while growth in the second quarter will be close to zero, as expensive energy prices will weaken business consumption and investment.

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