New Highest Level of Annual Inflation Rate in the Euro Area

According to Eurostat, the annual inflation rate in the euro area peaked in December 2021, rising to a high of 5%. This is the new highest level since Eurostat started monitoring data. In December, the annual inflation rate in the euro area, measured by the harmonized index of consumer prices (HICP), increased by 0.1 percentage points compared to November 2021. The most pronounced increase in prices is visible in energy, by as much as 26% compared to the same month in 2020.

During the first year of the pandemic, in December 2020, consumer prices in countries using the common European currency were 0.3% lower than in the same month in 2019. Excluding the price of energy, annual inflation in the euro area in December 2021 was 0.3 percentage points higher than in November of the same year, or 2.8%.

In December 2021, one of the price increases was visible on fresh food, which was 4.6% more than in December 2020. In November of the same year, fresh food prices rose by 1.9%. Excluding the price of energy and fresh food, annual inflation in the euro area in November 2021 was 2.6%, while in December 2021 it was 2.7%.

Eurostat estimates also show that among the eurozone countries, in December 2021, prices rose the most in the Baltics, while in Estonia by 12%, in Lithuania by 10.7%, and in Latvia by 7.7%. The situation is not better either in Spain, where there was a jump of 6.7%, while in Belgium and the Netherlands 6.5% and 6.4%.

The eurozone’s largest economy, Germany, grew its annual inflation rate by 5.7% in December, with Ireland at the same rate.

The most modest growth in consumer prices on an annual basis in December 2021 had Portugal with 2.8% and Malta with 2.6%.

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