2024-01-05 12:15:57
According to a rapid estimate, published Friday by Eurostat, annual inflation increased by 2.9% in December 2023, compared to 2.4% in November.
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The annual inflation rate is increasing in the euro zone. According to data published Friday by Eurostat, the European statistics office, prices increased by 2.9% in December, compared to 2.4% the previous month.
Foodstuffs, tobacco and alcohol are experiencing the strongest growth. Industrial goods excluding energy and energy are the other components of this inflation.
For Zsolt Darvas, researcher at the Bruegel Institute, current geopolitical tensions might make the situation even more complex.
“The security situation in the Middle East poses a risk to global prices, particularly global oil prices and energy prices in general. So far the impact has been limited, but a possible escalation of the situation might lead to higher oil and energy prices“, he warns
“This might have an impact worldwide, including Europe and the Eurozone. And this might maintain inflationary pressure for longer“.
This increase, following several months of decline, raises questions regarding the next measures of the European Central Bank (ECB). According to experts, the trend of recent months suggested a possible drop in interest rates. But the rebound in inflation might postpone this eventuality.
“_In recent years, high inflation has reduced real wages, but today wage growth has accelerated and inflation has slowed. Real wages, the purchasing power of consumers, are therefore increasing. This might therefore imply demand pressure and make a sustainable reduction in inflation more difficult. This is why I expect that the ECB will not start cutting interest rates any time soon,” says Zsolt. Darvas.
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