By Swann Collins, investor, writer and consultant in international affairs – Eurasia Business News, July 29, 2022
Euro area annual inflation is expected to be 8.9% in July 2022, up from 8.6% in June according to a flash estimate from Eurostat, the statistical office of the European Union.
Looking at the main components of euro area inflation, energy is expected to have the highest annual rate in July (39.7%, compared with 42.0% in June), followed by food, alcohol & tobacco (9.8%, compared with 8.9% in June), non-energy industrial goods (4.5%, compared with 4.3% in June) and services (3.7%, compared with 3.4% in June).
There are large disparities between the member states of the euro zone. France is hit by 6.8% inflation in July according to Eurostat, just ahead of Malta (+6.5%). Inflation in July reached 8.4% in Italy and 8.5% in Germany.
The three Baltic countries are the ones where bills and prices are soaring the most, with an inflation rate exceeding 20%. In terms of dynamics, here again, strong disparities can be noted: in July, price increases slowed in five countries, including Belgium and Italy, while they accelerated sharply in Latvia, the Netherlands, Cyprus and Estonia.
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The situation is also critical in the United States, where annual inflation hit record 9.1% in June and 8.6% in May, after 8.3% in April and 8.5% in March. This is the highest level of inflation never seen in the United States since February 1982 and the dynamic has been here for months. U.S. inflation already reached 7.5% in January after hitting 7% in December 2021, 6.8% in November and 6.2% in October.
Amid this high inflation in the Euro area and in the U.S., gold prices hit a high of $1,769 per troy ounce on July 29, 2022, gaining 0.28%.
High inflation in Europe since 2021 has been pressuring the GDP growth. In the second quarter 2022, seasonally adjusted GDP increased only by 0.7% in the euro area and by 0.6% in the EU, compared with the previous quarter, according to a preliminary flash estimate published by Eurostat, the statistical office of the European Union. In the first quarter of 2022, GDP had grown by 0.5% in the euro area and 0.6% in the EU.
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© Copyright 2022 – Swann Collins, investor and consultant in international affairs.