by Pekka Vanttinen
Estonia, Latvia and Lithuania currently have the highest monthly inflation rates in the euro area, latest Eurostat estimates show.
Estonia ranked first in the euro area, with a 12% inflation rate for December. The other two countries topping the list were Lithuania, with a 10.7% inflation rate, and Latvia, with 7.7%.
The only two countries with an inflation rate below 3% in December were Malta with 2.6% and Portugal with 2.8%, followed by Finland with 3.2% and Austria with 3.8%.
Providing a longer-term perspective is the annual inflation rate, which for December 2021 amounted to 5% compared to December of last year.
The surge in energy prices has by far been the most important component behind rising inflation rates in the euro area, Eurostat, the EU’s statistical office, announced on 7 January. Compared to roughly a year ago, energy price levels saw a 26% increase, followed by food, alcohol and tobacco (3.2%), non-energy industrial goods (2.9%) and services (2.4%).
Last autumn, inflation across the area hit its highest level in 13 years. This was due not only to higher energy prices but also to a quick reopening of the economy. Prices were also exceptionally low during the pandemic last year.
The European Central Bank (ECB) has been confident that inflation will go down during this year. However, the new pandemic wave may alter predictions and pose new challenges. The ECB has stated that its mission is to aim at an inflation target of 2% in the medium term.
The euro area currently consists of 19 of 27 EU countries, including Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland.
*first published in: www.euractiv.com