Inflation on the way to 10% in the euro zone

Inflation knows no respite in the euro zone. In August, the rise in prices stood at 9.1%, against 8.9% the previous month (and 3% a year ago), according to data published, Wednesday August 31, by Eurostat, the European statistics agency. “Inflation will reach 10% before the end of the year”, says Jack Allen-Reynolds, analyst at the research firm Capital Economics. France, however, experienced a slight respite in August: the rise in the harmonized price index (which allows European comparisons) was only 6.5% in August, against 6.8% in July.

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As since the beginning of this surge in inflation, energy remains the main explanation for the rise (+38.3% over one year, despite a slight decline compared to July), while the increase in food, in the euro zone, exceeded the 10% mark for the first time (+10.6%). More worryingly, a sign that the phenomenon is spreading to all sectors, so-called underlying inflation (excluding food, tobacco, alcohol and energy, sectors which are more volatile) reached 4.3%, against 4% in July ( and 1.6% a year ago).

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“Over a month, energy prices stagnated, following the fall in the barrel of oil, but this is probably only temporary, given the uncertainties on gas supplies, said Pushpin Singh, an economist at the Center for Economics and Business Research. With food inflation and this summer’s drought hitting agricultural production, the outlook is bleak for the Eurozone. »

Disparities between countries

Another trend is that the rate of inflation tends to fragment within the euro zone. The Baltic countries continue to experience almost uncontrolled inflation, at more than 20% (including 25% in Estonia). The large countries of northern Europe are also in a strong upward trend. Belgium (+10.5%) and the Netherlands (+13.6%) saw increases of more than 1.5 points in August alone. Germany, the region’s largest economy, recorded an 8.8% rise in prices, compared to 8.5% in July.

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On the other hand, some countries are experiencing an initial decline, thanks to the drop in oil prices during the summer. Among them, Greece, Portugal or Spain. France is also part of this group and remains the country in the euro zone where inflation is the lowest, thanks to the tariff shield, in particular. This should continue to play full in the coming months, especially as the discount on fuel prices passes on Thursday 1^er September, from 18 euro cents to 30 euro cents per litre.

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