Prices in the euro area have recently risen sharply.
(Photo: dpa)
Dusseldorf/Frankfurt The inflation rate in the euro area continued to rise in April: Consumer prices rose by 7.5 percent compared to the same month last year, as the European statistics office Eurostat announced on Friday in Luxembourg based on an initial estimate.
Experts interviewed by the Reuters news agency had expected this increase. In March the value was 7.4 percent, in February it was 5.9 percent.
For Germany, the Federal Statistical Office had already reported an inflation rate of 7.4 percent for April. However, the calculation method for Germany differs from that at European level.
According to the Eurostat calculation method, inflation in Germany was even 7.8 percent. The country with the highest inflation this month is Estonia (19 percent), followed by Lithuania (16.6 percent) and Latvia (13.2 percent).
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Inflation is currently being fueled by the aftermath of the war in Ukraine and the associated sanctions. Russia is a major exporter of oil and gas to Europe, but also of wheat and other raw materials needed for fertilizers, for example.
Energy as the main driver
According to Eurostat, energy prices in the euro area rose by 38 percent for the year in April, and by as much as 44.4 percent in March. Unprocessed food prices rose 9.2 percent this month. According to the statistics office, the prices for services rose by 3.3 percent.
Ex-Energy, Food & Beverage, core CPI inflation rose to 3.5 percent in April from 2.9 percent in the previous month. Core inflation is less volatile and is therefore considered by many economists as a reliable measure of inflation trends.
The high inflation is also putting the European Central Bank (ECB) in a difficult position. Inflation is well above its medium-term target of two percent for the currency area. Most recently, several ECB council representatives have already announced a rate hike for July.
For VP Bank chief economist Thomas Gitzel, the latest figures for the central bank are a clear call to action. “With the outbreak of the war, the inflationary pressure increased and became broader. Measured against this, a rate hike in July is a must.”
According to Alexander Krüger, chief economist at the private bank Hauck Aufhäuser Lampe, a “serious fight against inflation” is not imminent. “The ECB is unlikely to follow in the Fed’s footsteps.” The US Federal Reserve has already initiated the turnaround in interest rates.
More: Inflation in Germany rises to 7.4 percent in April