THE CIRCULAR

Inflation rates soars to 40-year high of 6.7%

Photo by 3844328 on pixabay

The conflict between Russia and Ukraine has sparked increases in energy market, which just resulted in higher inflation rates in Ireland and in the Eurozone. Inflation is no longer a temporary problem, European states have to take actions against rising inflation to undo the post-pandemic recoveries.

Inflation in April reached 7.5% In Europe and 6.7 in Ireland on an annual basis, an all-time high for the eurozone. The graphs represents a shocking rise compared to just one year ago when it was around 1.1% in Ireland and 1.3% in Eurozone.

Data by Central Statistics Office

The demand for energy such as natural gas being supplied from Russia is the most significant reason behind soaring inflation.

The sanctions being imposed on Russia after its attack on Ukraine led to counter-actions towards European countries.

Russia is the most largest gas supplier in the world. Europe dependence on Russian gas is not new, but too heavy that Putin demanded gas payments be paid in ruble, Russian currency. As European countries are heavily dependent on Russian supply, this fuelled rise in inflation.

Another causing factor is increase in patrol prices in the global market. In Ireland diesel and patrol skyrocketed by 41% and 35%, while overall food prices are only 1.3% higher compared to last year’s prices.

While the prices in the island are still reasonable in comparison with Greece, Portugal, Poland and Turkey ,which are struggling with deep economic issues.

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