Inflation in the eurozone will be around 7.5 percent in April, a slight increase compared to a month earlier. This is evident from the preliminary figures published by Eurostat on Friday. In March, the year-on-year increase in goods and services was 7.4 percent.
Uncertainties about gas supplies for the coming years will not disappear for the foreseeable future. And so, as in recent months, the largest increase has been seen in energy prices (38 percent), although these were slightly lower on average in April than in March. Consumers paid an average of 6.4 percent more in April for food, alcohol and tobacco than a year ago, and prices in the services sector are also rising steadily but significantly (3.3 percent).
At the same time as the inflation figures came on Friday, the estimates of economic growth in Europe in the first quarter of this year also came out. In the eurozone, GDP was 0.2 percent higher than at the end of 2021.
The opening of the economies after last winter’s lockdown has partly boosted that growth, but with the exception of countries such as Austria, Portugal and Latvia, those growth figures were below 1 percent for most countries. In Sweden and Italy there was even a slight contraction compared to the previous quarter. Compared to a year earlier – when there were still plenty of lockdowns due to the pandemic – growth was higher, for the eurozone at an average of 5 percent.
In the Netherlands, inflation according to the European harmonized consumer index (HICP) was 11.2 percent. The HICP differs somewhat methodologically from the consumer price index (CPI), which is customary in the Netherlands, which makes it possible to compare at European level.
This increase is half a percentage point lower than in March, and is partly due to the more moderate increase in energy prices (that includes motor fuels). At 83 percent in April, this was significantly lower than in March (almost 100 percent). This, in turn, has to do with the excise duty reduction introduced by the cabinet last month (for example, more than 17 cents for petrol, and 11 cents for diesel) – although a liter of Euro95 still costs more than 2.20 euros per litre.
Still, prices in the rest of the economy continue to rise steadily, fueled by a mix of high energy prices, congestion in the global transport sector and high world food prices, which have been exacerbated by the war in Eastern Europe. After all, many countries depend on grain or maize imports from both Ukraine and Russia. In the Netherlands, consumers paid on average more than 7 percent more for food, drink and tobacco.
These inflation figures are only a first estimate. The figures according to the CPI will be released in May and are generally about 1 to 2 percent lower than HICP inflation.
Energy price measurements differ
The spread in inflation between countries in the eurozone is striking. In the Netherlands, for example, price increases have been well above the European average for some time now. In Estonia, inflation was even 19 percent last month, while in France it was limited (but also rising) to 5.4 percent.
This spread can be explained, among other things, by the different ways in which European countries measure energy prices. Because although all countries feel the high energy prices, it matters exactly what the energy market looks like in a country. In some countries, such as Estonia, fixed contracts for consumers play a relatively minor role, and prices are mainly determined variably.
“In countries in which permanent contracts also play a role in the market, there are differences in the calculation. In some countries, just like in the Netherlands, the price of newly concluded contracts is assumed, in other countries the prices of current permanent contracts are included in the calculation,” Statistics Netherlands explains when asked.
Government intervention in the energy market can also cause differences. Last year, for example, France decided to freeze gas and electricity prices in an attempt to preserve purchasing power for consumers.
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