Friday, March 24

Inflation in the Eurozone breaks another record in January and reaches 5.1%

The year-on-year inflation rate in the euro zone stood at 5.1% last January, one tenth above the rise observed in December, which represents the highest rise in prices in the euro region of the entire the historical series, according to the data confirmed this Wednesday by the community statistical office, Eurostat.

In the EU as a whole, the year-on-year inflation rate stood at 5.6% in January, three tenths above the level registered in December 2021.

According to Eurostat data, the rise in prices in the euro zone at the start of 2022 responded to the 5.2% year-on-year rise in the cost of fresh food, compared to 4.7% in the previous month, while the rise in the price of energy accelerated to 28.8% from 25.9% in December.

In turn, services became more expensive by 2.3%, one tenth less than the year-on-year increase observed in December, while non-energy industrial prices moderated their increase to 2.1% from 2.9% in December.

The good news is the fall in core inflation (which excludes the most volatile elements of the shopping basket, such as energy and food), which moderated in January for the first time since July 2021. This is a figure that the European Central Bank (ECB) pays special attention in its monetary policy.

Specifically, when excluding the impact of energy from the calculation, the year-on-year inflation rate in the euro zone stood at 2.5% in January, compared to 2.8% in the previous month. Excluding also the effect of the prices of fresh food, alcohol and tobacco, the core inflation rate moderated to 2.3% from the historical maximum of 2.6% reached last December.

Among the EU countries, the largest price increases were registered in Lithuania (12.3%), Estonia (11%) and the Czech Republic (8.8%) while the most moderate increases were observed in France (3.3 %), in Portugal (3.4%) and Sweden (3.9%).

In the case of Spain, the harmonized inflation rate stood at 6.2% in January, compared to 6.6% in December, which implies an unfavorable price differential with respect to the euro zone of nine tenths, compared to the 1.6 points of the previous month.