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The
annual rate for the 21 countries using the euro currency
compared to 1.9% for February before the war started and blocked
supplies of oil and gas from the Persian Gulf.
Energy prices increased 4.9% percent in March compared to a 3.1%
decline in February, Eurostat figures showed.
The war's impact on prices has already hit home at the vast
Trionfale indoor market in Rome just north of the Vatican, where
vegetable stand owner Anna Caruso said the higher cost of fuel
was being reflected in prices for zucchini, eggplant and fruit.
“If the price of fuel increases, those who transport will
increase the general price,” she said. “With many items, they
say, I can't afford this ... and shift toward the cheaper
items.”
Some prices were higher due to some produce not being in season,
said stand owner Paola Ianzi, “but the increase is also
partially due to the war because diesel and fuel increased and
those who transport fruit and vegetables need to compensate
that."
Food price inflation came in at a relatively moderate 2.4% while
services, a broad category ranging from medical care to
haircuts, rose 3.2%.
European Central Bank head Christine Lagarde has said that
businesses may be quicker to raise prices during this outbreak
of inflation due to bitter memories of the last episode of
higher prices in 2022, when inflation rose to double digits.
Russia cut off most supplies of natural gas to Europe and oil
prices rose, sending energy costs through the roof.
Iran has blocked most of the tanker traffic through the Strait
of Hormuz, the waterway through which some 20% of the world's
oil and gas typically passes. That is raising the prospect of
sharply tighter markets for fuel in the coming weeks and months.
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Associated Press journalist Trisha Thomas contributed from Rome.
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