FRANKFURT, DE~ Despite the encouraging decline in European inflation to 6.1%, consumers have not yet felt any substantial relief in the price of food and other necessities. Eurostat, the European Union’s statistical agency, reported on May’s annual number for the 20 nations using the euro currency, and it was lower than April’s 7%.
It was encouraging to see that price rises, which skyrocketed to record highs in October, appear to be levelling out.Although energy and supply bottlenecks have been relaxed, rising costs remain pervasive in the economy as workers push for greater wages and businesses find they can charge more to compensate. For folks like Brigitte Weinbeck, 76, who was out shopping at an outdoor market in Cologne, Germany this week, relief is still quite some time away.
Meanwhile, since the conflict in Ukraine began, St. Wilhelm Roman Catholic Church’s food pantry in Berlin has doubled the number of people it feeds to 200. In May, food costs in the Eurozone jumped by 12.5% from the same month a year ago, which is terrible, but it was less than the 13.5% increase seen in April.
The drop in energy prices from a year ago of 1.7% after a rise of 2.4% in the previous month was a major contributor to the lower overall inflation number. The less volatile core inflation rate, which does not include food and energy prices, decreased to 5.3% from 5.6% in April. That number is more indicative of pricing pressures in the economy brought on by increased demand for goods and salaries. At this level, the European Central Bank is likely to approve yet another interest rate hike at its upcoming meeting on June 15.
Germany, France, and Italy, the three largest eurozone economies, all saw their respective inflation rates drop to 6.1%, 5.2%, and 7.6%, respectively. According to economist Rory Fennessy of Oxford Economics, the decrease was “broad based, with food, energy, and core inflation all contributing to the easing.” Midway through 2021, inflation skyrocketed as the global economy recovered from the worst of the epidemic, straining supply of parts and materials, and worries that Russia may attack Ukraine drove up the price of natural gas and oil.However, analysts have warned that it may be a long time before displeased shoppers see more typical inflation reflected in price tags in stores. Even if prices are increasing at a slower rate, they are still quite high because of Russia’s war in Ukraine and other causes.
