Inflation continues unabated in the eurozone and sets a new record in February

Inflation once again broke the records of its historical series in the euro zone, reaching 5.8% in a sustained trend that already raises questions about its behavior in the rest of the year.

According to the European statistics agency, Eurostat, inflation, which had already broken the records of its historical series in January by registering 5.1%, shot up 0.7 percentage points in February.

Among the major euro zone economies, Eurostat recorded an increase in inflation in February of 5.5% in Germany (5.1% in January) and 4.1% in France (3.3% in January).

In Spain, meanwhile, Eurostat estimated 7.5% inflation in February. On Monday, the National Institute of Statistics (INE) of that country had announced a record of 7.4%, which already represented its highest level in 30 years.

In January, Spain had registered an inflation of 6.2%, according to Eurostat.

Lithuania -with inflation in February estimated at 13.9%- and Estonia -12.4%- are the two countries with the strongest increase.

At the other extreme, France exhibited 4.1% and Portugal 4.4%, both countries with low levels of inflation but still higher than the results they had posted in January.

The presentation of these Eurostat estimates coincided with a rise in Brent oil prices, to more than 110 dollars per barrel, their highest price in seven years.

Meanwhile, the price of natural gas in Europe reached 194,715 euros per megawatt/hour (MWh).

constant pressure

According to Eurostat, this trend in energy prices does not give respite to inflation.

According to the agency, the weight of the increases in energy is of such magnitude that if this factor is eliminated from the calculations, inflation in the eurozone in February would have been around 3 percent.

In addition, the European continent now lives with a worsening reality, given the intense mobilization of resources to support Ukraine, which is suffering a military invasion by Russia.

It is estimated that practically a third of the natural gas used in Europe comes from Russia, and the new scenario makes Europe’s need to find an alternative that also allows it to reduce costs even more urgent.

In addition, the rise in energy prices ends up exerting pressure on consumer prices in the food segment.

In addition, the European Union (EU) adopted heavy sanctions against officials and entities in Russia, restrictive measures of such scope that, as leaders of the European institutions admit, they will also have a cost for the bloc.

Above 6%

For Jack Allen-Reynolds, an analyst at the consulting firm Capital Economics, the sustained upward trend in inflation and the new scenario marked by a warlike conflict should cause inflation to exceed 6% by the end of this month.

The Eurostat numbers, he noted, “suggest that price pressures remain extremely strong, so we expect core inflation to rise further. Coupled with higher energy and food inflation, this should boost the headline rate.” above 6%, probably in March”.

From that month, “both headline and core inflation may be above the 2% target well into next year, if not much longer,” he added.

Meanwhile, Fritzi Köhler-Geib, an economist at the German bank KfW, pointed out that Europe’s dependence on gas and oil imports “has caused inflation to rise in almost all member states of the euro zone during the last six months.”

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