Eurozone inflation hits record high, ECB faces dilemma
China News Agency, Beijing, April 2 (Reporter Liu Liang) Affected by the conflict between Russia and Ukraine, the inflation rate in the euro zone continued to hit a new high in March, which greatly increased the pressure on the European Central Bank.
Euro zone inflation soared to 7.5% in March, breaking the euro zone's record 5.9% last month and marking the biggest rise on record for the euro, according to the latest figures from Eurostat. .
Soaring energy costs triggered by the Russia-Ukraine conflict is seen as a major factor driving up inflation in the euro zone.
According to information disclosed by Eurostat, energy prices in the euro zone surged by 44.7% in March, up from 32% in February and the highest increase of all statistical categories.
In addition to energy, other areas of the euro area also saw different levels of inflation in March.
Among them, food prices, non-energy commodities, services, etc. all rose compared with February, and the inflation rate was higher than the expected target of the European Central Bank 2%, which further indicates that the scope of price increases in the euro area continued to expand.
From the perspective of the euro area, the inflation rate of many major economies also continued to rise.
Among them, Germany's inflation rate reached 7.6%, Spain reached 9.8%, Italy was 7.0%, and France's 5.1% was also higher than the European Central Bank's inflation target line.
European analysts expect that inflationary pressures on energy and food prices in the euro zone will continue to increase amid heightened uncertainty about Russia's natural gas supply, with inflation in the euro zone expected to peak in several months.
In the face of soaring inflation, the current European Central Bank seems to be caught in a dilemma.
The analysis pointed out that the goal of the European Central Bank is to reduce the inflation rate to 2% as much as possible, and considering that there are still several months before the euro zone reaches the peak inflation rate, it seems difficult for the European Central Bank to sit idly by in the face of the high inflation rate. .
But the problem is that the European economy is currently suffering from the double impact of the new crown epidemic and the conflict between Russia and Ukraine. If the European Central Bank immediately comes to the rescue and adopts a contractionary policy, it may further increase the downward pressure on the economy.
How to balance economic growth and rising inflation is obviously a difficult problem for the European Central Bank.
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