Inflation in Europe: How has it changed this last decade

Inflation. Something that everyone is afraid of, but what does it mean? The dictionary defines inflation as “a general increase in prices and fall in the purchasing value of money.” This essentially means that inflation is when prices rise when the value of money stays the same, or when prices rise but wages stay the same. There are various famous examples of where inflation has been catastrophic. For example, in Venezuela, inflation has reached a rate of 53,798,500%. This means that money in Venezuela has become beyond worthless, to the point where artists started making art out of worthless bolívar notes, or the fact that 1 liter of milk can cost ⅓ of a monthly salary. One Venezuelan woman speaking to international news stated that “This plantain costs what my house cost 25 years ago.” Economists generally agree that this hyperinflation was caused by the actions of President Nicolás Maduro in 2016, who decided to mass-print more money to combat economic problems, causing the value of the currency to decrease, as it was completely worthless. COVID has brought a new economic crisis upon the world, leading to unseen levels of debt and inflation, and Europe has recently not been immune to this.

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This week, inflation has sharply increased in Europe, reaching the highest it has ever been in the last decade. This inflation was largely caused by the effects of the pandemic since summer sales in clothing and tourism started later in the summer due to pandemic responses. More specifically, “Energy prices have risen 15.4 percent, food alcohol and tobacco prices climbed 2 percent, and industrial goods prices increased 2.7 percent. Core inflation, excluding the more volatile energy, food, alcohol, and tobacco prices, more than doubled to 1.6 percent, its highest level since 2012.” However, economists believe this inflation will fall next year when the pre-pandemic economic results and measures by governments will begin to take place.