Food prices in the eurozone have risen much faster than other products over the past five years, disproportionately affecting poorer households.
This is according to European Central Bank (ECB) researchers. In a blog post, the organisation noted that food price increases have significantly outpaced general inflation since Russia’s invasion of Ukraine.
They explained that while food prices have historically risen slightly faster than other costs since the euro’s introduction in 1999, the gap observed since 2022 is unprecedented and persistent.
Overall inflation in the eurozone has climbed by 23% since the end of 2019, but food prices are now, on average, 30% higher than pre-pandemic levels.
In Belgium, food prices have surged by 38%, while increases in the Baltic states and Hungary exceed 50%.
The economists attributed the steep rise to several factors. The war in Ukraine has driven up energy and fertiliser costs, which, in turn, has pushed wages in the food industry higher.
Additionally, the prices of key commodities such as olive oil and cocoa have soared, partly due to climate change.
The researchers emphasised that food inflation’s disproportionate impact on lower-income households is significant for ECB policy.
Shrinking purchasing power among poorer families could lead to higher wage demands, potentially fuelling further price increases.
