The economic damage of the war in Ukraine weighs more and more across Europe and the already record inflation rises further, while the estimates on GDP growth are reduced.
In Spain, harmonized inflation, in the preliminary reading for March, rose above the estimates to 9.8% on an annual basis. The figure is definitely higher than the + 7.6% in February and the + 7.8% expected by the consensus of economists. Spanish inflation figures in March “are impressive,” they say from Oxford Economics. On a monthly basis, consumer prices in Spain increased by 3.9% according to EU harmonized standards. “It is the strongest monthly increase in 30 years of data available,” the experts explain.
New leap, much higher than expected, also for Germany’s inflation in March. Consumer price growth reached 7.3% yoy, up from 5.1% in February. According to the preliminary estimate of the federal statistical agency, Destatis, in one month the prices have risen by 2.5%. The general index was pushed upwards by the energy item, which in March saw prices jump to more than 39.5%, in the comparison on an annual basis, compared to the 22.5% in February.
Germany has started preparing for a sudden drop in Russian natural gas supplies, following threats to cut energy exports if ruble payments are not made. German Economy Minister Robert Habeck said Berlin has activated the early warning phase, the first of a three-phase emergency plan, which aims to safeguard the country from any possible reduction in Russian gas deliveries, adding that Russian supplies continue for now. “At the moment there is no shortage of supply, but we must prepare for the case of an escalation by Russia,” he said. L’
All of this will feed the 19-member eurozone inflation figure to be released on Friday. In the Eurozone, price growth is nearly three times higher than the European Central Bank’s 2% target, fueling the risks of stagflation. “The longer the war lasts, the greater the costs,” European Central Bank President Christine Lagarde told Cyprus, reiterating that any hike in interest rates from historic lows will be gradual, describing “significant risks to growth. “and” considerable uncertainty “about the economic outlook.
According to Lorenzo Codogno of the London School of Economics, interviewed by Xtb, “another shock of global dimensions hit the economy, after the pandemic crisis and the great financial crisis of 2008-09, which was followed by the debt crisis in Europe. The world economies, and especially the European ones, were still in a period of convalescence before the conflict and therefore the new crisis risks amplifying or reversing the trends and changes taking place. The rise in energy prices and some other raw materials will be prolonged, will bring inflation even higher and reduce economic growth. In the coming months “, concludes the expert,” the Italian economy will also be close to a recession phase “. (All rights reserved)

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