Eurozone inflation expanded faster than expected in the second quarter, with the exception of Germany, the traditional European engine, as prices set new records due to soaring energy costs, a year ago in July. It reached 8.9% compared to. , Stalled.
Prices in 19 countries that use a common European currency have risen from the 8.6% mark hit in June. Their economy grew 0.7 percent in the three months from April to June compared to the previous quarter, as official figures released on Friday showed.
Germany, Europe’s largest economy, stagnated in the second quarter as trade slowed and efforts were made to resupply natural gas from Russia, which accounts for nearly one-third of Germany’s gas usage.
Elsewhere in Europe, countries whose economies were less dependent on fossil fuels from Russia grew strongly at the same time, effectively flipping the script of the European economic story, driven by Germany. I did.
France, Italy and Spain (all countries with a strong tourism sector) experienced higher-than-expected economic growth during the three months from April to June. The French economy grew 0.5% from the first quarter, while Italy grew 1% and Spain grew 1.1%.
Germany reported on Thursday that July’s annual inflation rate rose from 8.2% last month to 8.5% as further cuts in Russia’s natural gas supply raised concerns that already record energy prices would rise further. did.
The latest figures seem to support last week’s decision by members of the European Central Bank’s board, taking a strong step in dealing with inflation by raising three interest rates by 0.5 percentage points. This is the first rise in more than 10 years.
Economists expect banks to continue raising rates again at their next meeting to curb inflation amid growing concerns about a slowdown.
“Inflation hasn’t shown any signs of a short-term chill and economic outlook hasn’t deteriorated yet, so when banks meet again in September, a further 0.5 percentage point increase,” said Nicola Nobile of Oxford Economics. I’m looking forward to it. ” ..
According to the latest data on Thursday, the US economy has shrunk for the second quarter in a row, raising concerns that the country may be in recession or that it may have already begun. GDP fell 0.2% in the second quarter and 0.4% in the first quarter. Inflation is also rising in the United States, and the Federal Reserve has raised key interest rates by three-quarters in the last two meetings and is expected to rise further in the future.
