Inflation in the eurozone has not peaked yet and may follow the trajectory seen in the Baltic States where consumer price rises have been in excess of 20%, Gediminas Simkus, Lithuanian central bank chief, has told the Financial Times.
“When I look at the inflationary pressures in the euro area, it resembles what we experienced in Lithuania six months ago,” Simkus is quoted. “Peak of headline inflation in the euro is probably just around the corner.”
The Lithuanian central banker also told the publication that even if energy costs in Europe stopped growing, their effects on other prices might persist.
“I think the pass-through of these energy impulses into final goods and services is still to be seen,” he said. “That is exactly what worries me.”
Meanwhile, Simkus’ Latvian counterpart Martins Kazaks believes that the rapid rise in eurozone inflation “is not a passing shock” but rather “a permanent shift, which requires structural solutions”, including an ambitious EU energy strategy.
“If we are unable to ensure that our economies get access to affordable energy, we will start losing companies that are energy intensive and they will relocate and that will have consequences in terms of unemployment and lower growth,” Kazaks told the Financial Times. (LRT/Business World Magazine)