May 14, 2021

Eurozone inflation accelerates to 1.3% in March and returns to pre-pandemic level


The year-on-year inflation rate in the euro zone stood at 1.3% in March from 0.9% in February, which represents the largest increase in prices since January 2020 as a result of the impact of the evolution of energy prices, according to the first estimate of the data published by the Community statistical office, Eurostat.

The Bank of Spain advocates changing the inflation target of 2% to give more room to monetary policy

The Bank of Spain advocates changing the inflation target of 2% to give more room to monetary policy

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The rise in prices in March is due to the impact of the evolution of energy, which in the third month of 2021 appreciated by 4.3% year-on-year, compared to the 1.7% drop observed the previous month, while the Fresh food became more expensive by 1.5%, in line with the rise in February, and services rose by 1.3% year-on-year, one tenth more than in the previous month.

On the other hand, the cost of non-energy industrial goods registered a year-on-year rise of 0.3% in March, below the 1% increase observed the previous month.

Thus, when excluding the impact of energy prices, the year-on-year inflation rate in the euro zone stood at 1%, two tenths below the February figure.

By also leaving out the effect of fresh food, alcohol and tobacco, the core inflation rate in the euro zone has moderated in March to 0.9% from 1.1% in February.

Among the countries for which data were available, only Greece recorded a decline in prices in March, with a year-on-year decline of 2%, while Ireland, Cyprus, Portugal and Slovenia each recorded a 0.1% rise.

For its part, the largest price increases in March were observed in Luxembourg, with a rise of 2.4%, ahead of Austria and Germany, where the year-on-year inflation rate stood at 2% in both cases.

As for Spain, the harmonized inflation rate stood at 1.2% in March, compared to the -0.1% registered in February, which has reduced the price differential favorable to the country with respect to the eurozone.

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