Economic growth in the euro zone did significantly better than expected in the second quarter, at 0.7% compared to the previous quarter, while inflation hit a new record in July, at 8.9% year on year. announced this Friday the Eurostat institute.
New record high for inflation
Eurozone inflation was propelled to a new high by the war in Ukraine and Western sanctions against Moscow, to 8.9% in July, from 8.6% in June.
This indicator has reached a new high every month since November. In addition to soaring energy prices (fuel, gas, electricity), European households are increasingly faced with soaring food prices.
Among the components of inflation, energy still experienced the highest annual increase, although slowing, at 39.7% (compared to 42% in June).
Lowest inflation in France and Malta
Food prices (including alcohol and tobacco) increased by 9.8%, after 8.9% in June.
Those of industrial goods and services increased in July by 4.5% and 3.7% respectively, slightly up on the previous month.
The lowest inflation was recorded in France (6.8%) and Malta (6.5%) in July. The Baltic countries had the highest rates: 22.7% in Estonia, 21% in Latvia, 20.8% in Lithuania.
0.7% growth in the second quarter
If the war in Ukraine continues to drive up prices in the 19 countries sharing the single currency, it has not yet stalled the economy. After 0.5% GDP growth from January to March, economists expected a marked slowdown. But activity was driven by the good performance of tourist services thanks to the lifting of restrictions linked to the coronavirus pandemic.
” Good news ! The economy of the euro zone exceeds expectations in the second quarter”, rejoiced on Twitter the European Commissioner for the Economy, Paolo Gentiloni.
Crescita #Eurozona 0.7% nel second quarter. Meglio del previsto. Bene in particolare Italia e Spagna. Non siamo in recessione, ma remained the incertezza per i prossimi mesi and the inflation if maintained at livelli record. @EU_Eurostat
— Paolo Gentiloni (@PaoloGentiloni) July 29, 2022
But he warned that the rest of the year could be more difficult. “Uncertainty remains high for the coming quarters: we must maintain unity and be ready to respond if necessary to a changing situation,” he commented.
Strong growth in Spain, Italy and France
With an increase of 0.7% compared to the first quarter, or +4% compared to the second quarter of last year, the gross domestic product of the euro zone did better than that of the United States in April-June .
Within the European bloc, the situation is mixed. Growth was strong in Spain (1.1%), Italy (1%) and France (0.5%). But Germany, Europe’s largest economy, stagnated (0%).
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