Concerns about European Union Inflation 2008 levels are rising!

After reaching during the second half of 2020 in negative land and accumulate 9 consecutive months of progress since the start of 2021, inflation has reached in September, a rise of 3.4% in the eurozone and 3.6% in the whole of the European Union, which is the largest increase year-on-year since 2008, when the 27 suffered from the bursting of the previous economic crisis that hit the Old Continent.

However, this time the continuous upturn in consumer prices takes place in a scenario of economic recovery after the crisis caused by the coronavirus, although the International Monetary Fund (IMF) has already warned that the exit from the pandemic pothole could be complicated by the rise in inflation, after correcting its forecasts downwards.

By country, as shown in the graph above, it is the Baltic and eastern EU countries that take the lead in the uptick in consumer prices in September compared to the same month of the previous year, with Estonia and Lithuania registering an advance of 6.4%, Poland, Hungary and Romania exceeding 5% and 9 other countries exceeding the Community average.

Larger economies facing the European Union Inflation 2008 levels

Large EU economies, such as France, Italy and the Netherlands, record an inflation rate growth lower than the European average, between 2.7% and 3%, and the lowest rises correspond to 3 Mediterranean countries, Malta, Portugal and Greece. Germany, on the other hand, registers a higher growth in inflation than Spain, but it is attributed to fiscal changes in the last 12 months, as university professor Combarro has specified in his Twitter account.

However, the president of the Bundesbank, Jens Weidmann, announced his resignation at the end of the year for personal reasons hours before Eurostat figures were released. The leader of the German central bank warned in the statement in which he announced that he would not remain in office until the end of his mandate that the European Central Bank must be aware of inflationary risks and not only deflation, suggesting changes in Community monetary policy, according to Reuters.

Experts on European Union Inflation 2008 levels

In fact, Alvaro Head, country head of UBS Iberia, provides that the rise of inflation suppose, precisely, more restrictive monetary policies by several central banks around the world, giving as an example that the ECB has announced that it will recalibrate your programs, purchase of assets in the fourth quarter, although the monetary institution considers that the rise in inflation is a transitory phenomenon.

Mainfirst manager Thomas Meier links rising inflation to logistical disruptions. "There is one long-term inflationary observation that cannot be avoided: the need to diversify supply chains," he says. Meanwhile, Jeremy Lawson, chief economist of Aberdeen, says that inflation will fall after the pandemic, coinciding with slow growth and low interest rates.

Generali Insurance and the European Union Inflation 2008 levels

For his part, Vincent Chaigneau, head of analysis at Generali Insurance, says that inflation can slow down the recovery and reduce the potential growth and purchasing power of workers, although he points out that the impact of the rise in energy raw materials is usually more moderate in the eurozone due to the stabilizing effect of taxes on the volatility of their prices.

Do you think another wave of problems will hit the Europe as the European Union Inflation 2008 levels rise?