inflation in Europe took positive turn with big drop to 6.1%, but prices are still a pinch for shoppers who have not seen yet real satisfaction in What do they pay for food and other necessities.
annual figure in may fall from 7% in April for 20th countries that use The European Union’s statistics agency Eurostat said on Thursday that the euro.
It was very welcome sign that blast in price Increases – peaking in record double numbers last October – heading in Right direction.
But economists warn it will be several months before disaffected consumers see through more normal levels of Inflation is reversed on price tags in shops. While prices rising more Slowly, they are coming on summit of already- High costs triggered war Russia in Ukraine and other factors.
Relief is far away off for people like 76-yearBorn Brigitte Weinbeck, who He was shopping this week at a restaurant.air market in Cologne, Germany.
“I shop more consciously – for For example, I always make a plan in the beginning of week around what I’m going to cook and when and then I go shopping,” she said. “Otherwise, you sometimes make impulse purchases.”
Meanwhile, food bank Berlin’s Roman Catholic St. Wilhelm’s Church converted from serving 100-120 families before the war in Ukraine up to 200.
“Now there is people at who She is at the limit of coordinator Christine Klar said. They say prices have gone up a lot now. And now they are know Or heard that they are entitled use the food bankSo they come now.”
Food prices have gone up
Food prices in The Eurozone rose by a painful 12.5%. in drive from a year Earlier but still backing down from the recorded 13.5% increase in April.
The key to the lower headline inflation rate was energy prices, which fell 1.7% from a year before increasing of 2.4% a month ago.
Core inflation, which excludes volatile food and energy, eased to 5.3% from 5.6%. in April. This number is seen as a better indicator of price stress in the economy from demand for goods and higher wages. It is high enough that the ECB is expected to agree to another interest rate Increase at the June 15th meeting.
Inflation has decreased in The three largest economies in which the euro is used: Germany to 6.1%, France to 5.1% and Italy to 7.6%. the decline was widespread, with “Food, energy and core inflation all contribute to the mitigation,” economist Rory Fennessey at Oxford Economics writes.
economic inflation took off in In mid-2021, fears that Russia might invade Ukraine sent natural gas and oil prices soaring higher on Fears of lose Russian supplies and global economy recoil back It’s worse of Pandemic, straining supplies of parts f materials.
Power and supply bottleneck points relaxed, however higher Prices continued to go up economy as workers demand Better wages Companies find they can raise prices to cover the increased costs.
Overall inflation is increasing rapidly decliningdriven by factors such as lower energy prices and large base effects from 2022. In this context, it is important to remember that general price continuous level to rise from already high level ”, according to economists at SEB Bank.
Consumers will continue to have a hard time, though central banks will sort things out to an extent easier late in 2023 from the perspective of inflation targeting.”
Germany which economy have contracted for Two straight quarters, marks one identification of Economic recession, try to soften the blow of High energy prices with Subsidies for Families, businesses and discounted public Transit tickets. This helped in part push the energy increases to much less, but the food still spiked.
energy challenges
Rising prices for Energy and food were the main ones challenges for Europeans economy Because consumers are forced to spend more on necessities and they have less spend on Everything else.
The eurozone avoided recession in The first months of the yearin large part thanks to the governments scrambling to the line up non-Russian sources of l natural gas avoid energy disaster. the economy It only grew by 0.1% in the first Three months of the year.
weighs well on economic growth Quick attention rate Rise from the European Central Bank as it tries to push inflation towards its target rate of 2%.
High interest rates affect cost of cross borrowing economymake it more expensive To obtain a mortgage for buy a house or a business investment loan – in turn, reduce demand for Commodities that lead to inflation higher.
