Inflation in Greece jumped to 8 percent in March, and to 7.5 percent in the EU, according to preliminary data released on Friday by Eurostat, the statistical office of the European Union.
Inflation in Greece is fueled by the Russia-Ukraine conflict
The increases are fueled by the Russia-Ukraine conflict with the cost of Russian energy and Ukrainian grain dramatically spiking. Businesses and households continue to face a massive wave of price increases with the government struggling to reel them in.
The Greek government set an inflation target in its 2022 budget for 1 percent but it’s clear that is unachievable, with Greek Finance Minister Christos Staikouras estimating recently that it will now be set at 4 percent.
According to the February data of the Greek Statistical Agency ELSTAT, Greek inflation is driving electricity prices higher by an astronomical 71.4 percent, with natural gas leading all other forms of energy with a 78.5 percent raise. Fuels and lubricants rose by 23.2 percent, and heating oil rose by 41.5 percent.
Euro-area inflation sets record at 7.5 percent
Euro area annual inflation is expected to be 7.5 percent in March 2022, up from 5.9 percent in February.
It’s the fifth straight month that inflation in the eurozone has set a record, bringing it to the highest level since recordkeeping for the euro began in 1997.
The sharp acceleration in prices was driven primarily by rising energy and food prices due to the war in Ukraine. Energy prices accelerated to 44.7 percent from 32 percent in February.
Core inflation, which strips out volatile components of food and energy, rose to 3.2 percent in March from 2.8 percent in the previous month.
Inflation was especially acute, hitting double digits, in four member states with Lithuania leading the pack at 15.6 percent. The lowest rate was recorded in Malta, where inflation was up 4.6 percent. But even that’s more than twice the ECB’s target.
Among the largest member states, inflation in German was up 7.6 percent, in France 5.1 percent, in Italy 7.0 percent, and in Spain at 9.8 percent.
The latest figures make it more urgent for the European Central Bank (ECB) to get off the sidelines and take action, analysts said. The bank is balancing record inflation with the threat that the war may hurt an economy under pressure.
ECB Vice President Luis de Guindos said earlier this week that inflation “will continue rising over the next months,” with the peak expected in three to four months before slowing again.