In the eurozone, inflation slowed more sharply than anticipated in March. But food prices rose even as energy costs fell, according to official data released Friday.
According to the European Union’s statistics office, consumer prices rose 6.9 percent year on year, down from 8.5 percent in February.
Bloomberg analysts and financial data firm FactSet predicted that inflation in the 20-nation eurozone would hit 7.1 percent in March.
According to Eurostat, energy costs fell by 0.9 percent after rising by 13.7 percent in February.
Last year’s Russian invasion of Ukraine sent oil and gas costs soaring, but they have become more stable in recent months, aided by mild weather.
Food and beverage costs, on the other hand, increased by 15.4 percent in March, compared to 15 percent the previous month, according to the report.
Despite falling from a peak of 10.6 percent in October. Eurozone inflation remains significantly higher than the European Central Bank’s two-percentage-point goal.
The ECB has increased interest rates several times in order to cool off hot inflation. But the size of the next rate rise is uncertain in light of recent banking sector turmoil.
Fears about price rises continue as the eurozone’s core inflation rate. Which excludes volatile food and energy prices, rose to 5.7 percent in March from 5.6 percent the previous month.
“Descending headline inflation due to cooling energy prices will not be enough for the ECB to stop tightening. As policymakers are looking for clear signs of core inflation easing,” said Oxford Economics economist Riccardo Marcelli Fabiani.
However, inflation fell in some of Europe’s largest countries in March, raising optimism that the region has passed the worst price increases.
Price rise in Germany slowed to 7.4 percent in March, down from 8.7 percent in the first two months of 2022.
In France, inflation reached 5.6 percent in March, down from 6.3 percent the prior month.
In Spain, it fell further to 3.3 percent from 6% in February.
Luxembourg had the lowest inflation rate among the 20 eurozone countries, hitting 3.0 percent in February, according to Eurostat.
According to other Eurostat data released on Friday, the eurozone unemployment rate stayed stable in February at 6.6 percent.