Inflation in Europe rose to a new record in June 2022 on the impact of the situation in Ukraine and Western sanctions on Moscow, which worries European families.
And the European statistical office, Eurostat, announced on Friday that the inflation rate in the 19 countries of the eurozone reached 8.6% in June last year on an annualized basis, after it recorded 7.4% in April and 8.1% in May this year. year, which is the highest. recorded by Eurostat since the start of the index in January 1997.
“It’s hard for Europeans to buy food,” said Philip Wächter, head of economics at Ostrom Asset Management.
He explained: “We have never seen such a high share of food in history, and this will have serious consequences,” referring to the rise in prices for grains and oils used in industrial products.
Inflation continues to affect the energy sector, including electricity, oil, gas and others, as this component of the price index rose by 41.9% year-on-year in June 2022 after 39.1% in May 2022.
However, growth in food prices, including alcohol and tobacco, also accelerated, recording 8.9% last month after 7.5% in May 2022.
Fachter expressed concern about the great danger to the economy as families are forced to cut their spending. “At some point, the consumer is forced to make a decision: he needs gasoline to work, so it is deducted from other expenses, which creates a negative shock to the activity,” he said.
In May 2022, Brussels lowered its 2022 eurozone GDP growth forecast by 1.3 points to 2.7% in exchange for a 3.5 point increase in inflation forecast to 6.1%.
The situation could worsen even further if Moscow decides to completely cut off gas exports to Europe in response to Western sanctions.
“The outlook for the rest of the year is bleak,” warned Pushpin Singh, an economist at the Saber think tank. He explained that “the current shortage of gas as a result of reduced Russian exports prompted Germany and the Netherlands to activate their emergency plans to reduce consumption (energy). which will lead to a decline in production.
Source: AFP.