Eurozone July Inflation Rate Hits 8.9%... Highest Record Since Statistics Began

[Image source=AP Yonhap News]

[Asia Economy Reporter Lee Hyun-woo] The consumer price inflation rate in the Eurozone, consisting of 19 member countries using the euro within the European Union (EU), rose by 8.9% compared to the previous year, marking a new record high since the statistics began.

On the 29th (local time), Eurostat, the EU's statistical agency, announced that the consumer price inflation rate in the Eurozone for July increased by 8.9% year-on-year. This figure is the highest since related statistics began being compiled in 1997 and has repeatedly set new record highs since November of last year.

The record inflation was driven by a historic rise in energy prices across Europe due to ongoing sanctions against Russia following its invasion of Ukraine. By category, energy prices surged 39.7% year-on-year, leading the inflation spike. Food, alcoholic beverages, and tobacco, also sharply increased due to the impact of the Ukraine war, rose by 9.8%, non-energy industrial goods by 4.5%, and services by 4.5%.

Despite the rapid inflation rate, the preliminary estimate of the Gross Domestic Product (GDP) for the second quarter of this year showed an increase of 0.7% quarter-on-quarter in the Eurozone and 0.6% in all 27 EU member countries. By member country, Sweden's GDP rose the most at 1.4% quarter-on-quarter, followed by Spain at 1.1%, Italy at 1%, and France at 0.5%. Germany showed no change.

AFP news agency evaluated that the European economy has shown remarkable resilience despite the sharp rise in energy and food prices, noting that countries highly dependent on the tourism industry, such as France and Spain, demonstrated better-than-expected recovery.

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