There is no one to stop the escalation of prices. Eurozone inflation shot up to 8.1% year-on-year in May, according to data released this morning by Eurostat. This is a record rate in the history of the eurozone and is seven tenths more than in the month of April. Analysts expected 7.7%, which fuels fears of stagflation.
The data is known just a week before the meeting of the governing council of the European Central Bank (ECB), which, now, seems determined to start withdrawing the stimuli that the economy has had in the last ten years. At next week's meeting, rates will not be raised because, as the ECB has repeatedly explained, this will only be done once the extraordinary debt purchase program ends, which ends at the end of June. The first rise in the price of money will come, then, in July.
Where will the prices be then? Experts do not foresee that much higher than now, although it is difficult for them to go down, especially due to the feared second-round effects and salary pressure. Although this inflation in the eurozone is eminently supply-side -due to the energy crisis, the scarcity of some raw materials and bottlenecks-, wage tensions can skyrocket, especially in some eurozone countries where the unemployment rate is higher. short.
Looking at energy prices, they are up 39.2%, somewhat less than the 44.3% of two months ago, with the outbreak of the war in Ukraine. Also worrying is the underlying inflation data, without energy or fresh, which climbs to 4.4%, five tenths more than in April.
By country, the sharp trend in Estonia (20.1%), Lithuania (18.5%) and Latvia (16.4%) continues. In a second group there are countries that border on or exceed two figures. Like Slovakia and its 11.8%, the Netherlands and 10.2% or Greece and its 10.7%. Among the large nations, in Germany the rate is 8.7%, nine tenths more than in April, 5.8% in France (four tenths more) and 7.3% in Italy, after climbing one point.
Added to this is poor growth, which fuels fears of stagflation. Germany barely grew two tenths in the first quarter, like Italy, and France even fell by 0.2%. Spain did somewhat better, with growth of three tenths.
