Inflation in eurozone continues to swell

Inflation in the euro-area, comprising 15 EU member states including Malta, is expected to continue to escalate this month according to new estimates published yesterday by Eurostat, the EU statistical arm.

According to its monthly flash estimate, Eurostat said consumer prices in the 15 member states sharing the euro surged last month to the highest level since the eurozone was formed in 1999.

According to Eurostat, the 12-month inflation in the eurozone jumped to 3.5 per cent in March, up from 3.3 per cent in February and slightly above economists' forecasts of 3.4 per cent.

The figure, which came amid record oil prices of around 110 dollars a barrel, was well above the European Central Bank's comfort zone of just under two per cent.

Malta is also feeling the pinch particularly through the spiralling price of food on the international markets.

Last February, Malta's inflation rate reached an annual average of four per cent, a record for the past two years.

This has prompted the Commission to point a finger at the lack of competition in food importation in Malta stating in its Euro Area Quarterly report that "few food importers dominate the market and are hindering effective competition."

Malta imports almost all its food supplies.

Describing the March rate as "not a good figure", Commission spokesman for economic matters Amelia Torres said yesterday that "we have to avoid second-round effects, that is to say an inflationary spiral".

Ms Torres added that workers should keep their demands for wage increases "in line with productivity gains in order to maintain the competitiveness of the eurozone".