By Swann Collins, investor, writer and consultant in international affairs – Eurasia Business News, October 2, 2022

Euro area annual inflation is expected to hit 10% in September 2022, up from 9.1% in August 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 September (40.8%, compared with 38.6% in August), followed by food, alcohol & tobacco (11.8%, compared with 10.6% in August), non-energy industrial goods (5.6%, compared with 5.1% in August) and services (4.3%, compared with 3.8% in August).

There are large disparities between the member states of the euro zone. France is hit by 6.2.% inflation in September according to Eurostat (after 6.6% in August), just ahead of Malta (+7.3%). Inflation reached 9.5% in Italy and 10.9% in Germany.

The three Baltic countries are the ones where bills and prices are soaring the most, with an inflation rate exceeding 22% in September. 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.

The European statistics agency Eurostat earlier reported that the inflation rate in the euro zone in July reached 8.9% per year, reaching an all-time high. Among the countries with the highest inflation rate for the year were Estonia (23.2%), Latvia (21.3%) and Lithuania (20.9%). In August, annual inflation hit record 9.1%. The figures of September grew further.

In Germany, the rate of annual inflation is expected to be +10.0% in September 2022, reported the statistics agency De Statis. The inflation rate is measured as the change in the consumer price index (CPI) compared with the same month a year earlier. In August 2022, the inflation rate had been +7.9%. Based on the results available so far, the Federal Statistical Office (Destatis) also reports that consumer prices are expected to increase by 1.9% on August 2022.

Energy prices, in particular, have increased considerably since the war started in Ukraine and have had a considerable impact on the high inflation rate. Energy prices were 43.9% higher in September 2022 than in September 2021. There was also an above average rise of food prices by 18.7% from the same month of the previous year. 

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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 $ 1,676 per troy ounce on September 30. It was $1,769 per troy ounce on July 29, 2022. Gold prices were navigating between $ 1,614 and $ 1,626 per troy ounce on September 28.

Silver prices have been well performing over the past week, hitting $19.41 per ounce, after navigating between $17.93 and $ 18.31 on September 28. Silver gained +5.78% over the past 30 days.

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.

The exchange rate of euro/dollar now is : 1 euro for 0.98 dollar

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© Copyright 2022 – Swann Collins, investor, writer and consultant in international affairs.