Inflation on the continent may be starting to slow after months above 10%, according to the latest figures.
Inflation in the European area fell to 7% in April, down from 10.1% in November. Quoting statistics from Eurostat, however, French newspaper Le Monde warned that food prices – the sentiment barometer of most consumers – remain high at 14%.
The full Eurostat data of course offers a more nuanced and granular view of the situation. While inflation in the Euro region has indeed fallen to 7%, it increased between March and April from 6.9%. This was predicted some time ago but the overall trend is down.
Inflation within the European area stood at 8.6% in June 2022, 8.9% in July, 9.1% in August, 9.9% in September, 10.6% in October, 10.1% in November, and then fell to 9.2%, 8.6% and 8.5% in the months through to February. Inflation within the countries of the European Union meanwhile ran a little higher over the period – usually by around one percentage point.
There was a marked difference between individual nations. The highest inflation, according to Eurostat, in April was felt in Latvia, at 15%, with the lowest recorded being in Luxembourg – at 2.7%. There were still 12 nations on the list with no statistics for April, however. These included the UK as well as Hungary, which has seen inflation running above 25% for four months.
The new numbers have prompted some speculation the European Central Bank may soon pump the brakes on its interest rate hikes. Politico wrote earlier this week: “The strength of core inflation – still over twice the ECB’s medium-term target of 2% – makes another interest rate hike at this Thursday’s governing council meeting all but inevitable, but a larger hike seems less likely.”
Surprise Spanish GDP rise
Elsewhere, it was reported by the Spanish version of The Local that Spain’s GDP rose 0.5% between January and March, up from the 0.4% increase seen in the last three months of 2022. According to that site, the Bank of Spain had forecast that economy would only grow 0.3% in the first quarter of this year. All these figures were quoted from the national statistics agency INE. Dig a little deeper in them and this is the highest quarterly rise in GDP for Europe’s fourth-largest economy since the second quarter of 2022.
For its part, Germany reported at the end of last month its GDP in the first quarter of 2023 was ‘stagnant’.
Statistisches Bundesamt said: “GDP was unchanged (0.0%) in the first quarter of 2023 compared with the fourth quarter of 2022 after adjustment for price, seasonal and calendar variations, after decreasing at the end of 2022 (by a revised -0.5% in the fourth quarter year on year; before: -0.4%).
“The final consumption expenditure of both households and government declined at the beginning of 2023, according to the Federal Statistical Office (Destatis). Positive contributions, in contrast, came from capital formation and exports.”