London, (Business News Report)|| The inflation rate in the euro zone has recorded its highest rate ever during the month of March, at 7.5%.
The European Commission’s statistics office, Eurostat, said that the war in Ukraine is leading to a rise in food and energy prices in particular.
The inflation rate in the euro zone countries was 5.9% in February 2022, as this rate was the highest rate since Eurostat began working on this indicator in 1997.
Since last November, the inflation rate in the countries of the euro area has reached a record rate for five consecutive months.
The consequences of the Ukrainian war have already begun to materialize in the economic data issued. Inflation rate raised in the euro zone area to its highest level ever at 7.5% last March.
Eurostat explained that the main reason for the increase in inflation in Europe is mainly the rise in energy prices. At the same time, it pointed out that there are other reasons, represented by the rise in food and durable goods prices, in addition to the rise in the prices of services.
In turn, Hungarian Finance Minister Mihaly Varga said in a press statement that economic growth is expected to slow more than expected, as the Russian-Ukrainian war and high energy prices undermine the economic recovery from the Coronavirus pandemic.
Varga added that the repercussions of European sanctions on Russia and the Russian countermeasures increase the uncertainty about economic growth, pointing out to the need to adjust the budget after the elections to suit the changing economic environment.
Christine Lagarde, President of the European Central Bank, warned that the continuation of the conflict in Ukraine would keep energy prices and the cost of living rising, which could derail the post-COVID recovery.
She said during a visit to the island of Cyprus yesterday, that the Russian-Ukrainian war created a great deal of uncertainty in the prospects for the EU economy.
The war had halted a faster-than-expected recovery in the post-Covid-19 phase, due to the increase in the number of jobs, she added.
“The economic impact of the war is best captured by what economists call a ‘supply shock’, which is a shock that simultaneously pushes up inflation and reduces growth,” Lagarde told a news conference.
She said energy prices are expected to stay higher for longer, with gas prices already up by 52% since the start of the year and oil prices up 64%.