Inflation hits new record in Eurozone, slowing economy; estimates Eurostat
Brussels: Eurostat estimates that soaring inflation has started to harm the economic growth of the Eurozone. According to the agency, economic growth slowed in the first quarter of this year as inflation reached a record high across the eurozone. Experts share the concern that the rise in inflation could lead to a stalling level of economic growth in the euro zone. Although annual inflation in the eurozone has slowed to 6.9% in March 2023 from 8.5% in February 2023, there has been no significant decrease in inflation.
Euro zone economic growth was 0.3 percent in the last quarter of last year. In the first quarter of this year, that figure fell to 0.2 percent. It also adversely affected the GDP of the member states. Figures also show that, while GDP growth in France has slowed, GDP growth in Italy has fallen.
Last year, the Eurozone experienced 5.0% economic growth. There have also been concerns about whether the uncertainty created by the Ukraine conflict and soaring inflation will dampen economic growth once more. Inflation in the Eurozone is increasing.
The Baltic countries were hit the hardest by inflation. In Estonia, prices increased by 19%, in Lithuania by 16.6%, and in Latvia by 13.3%. It is reassuring to note that major economies such as France, Italy, and Germany have been able to keep inflation relatively under control.
However, the ECB’s refusal to intervene seriously on the issue of inflation has drawn criticism. Experts warn that if the ECB does not act quickly to control inflation, the entire eurozone will enter a recession.
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