Mina Agib buys meat and frying oil for his Berlin restaurant, Meya Meya. Two weeks ago, a supplier quoted him prices 70 to 100 percent higher than before. He did not say he was surprised.
Agib runs an Egyptian restaurant. His costs reflect what Eurostat, the European Union’s statistics agency, reported on April 1: inflation in the 19 countries using the euro hit 7.5 percent in March. That is a record. It is the fifth straight month the figure has broken the previous high. The last record, 5.9 percent, was set in February.
The number matters because it is not abstract. It is the cost of feeding a family. It is the price of keeping a restaurant open. It is the utility bill that arrives higher each month.
Energy costs drove the surge. Eurostat said energy prices rose 44.7 percent in March, up from 32 percent in February. That is not a small jump. That is a leap that changes how people live. Oil and gas prices were already climbing as economies recovered from the COVID-19 pandemic. Then Russia invaded Ukraine. Russia is a major oil and gas producer. Sanctions and export restrictions threatened supplies. Prices shot higher.
Food costs rose 5 percent, including alcohol and tobacco. That is up from 4.2 percent in February. Agib’s experience shows what that number means on the ground. When frying oil and meat double in price, a restaurant owner cannot simply absorb the cost. He must raise menu prices or cut portions or find cheaper ingredients. None of those choices are good.
The central bank now faces pressure to raise interest rates. That is a blunt tool. Higher rates can cool inflation by making borrowing more expensive. But they also slow economic growth. They make it harder for businesses to invest. They make mortgages more costly. The bank must decide whether to risk a recession to stop prices from climbing further.
Rising consumer prices are a global problem. Europe is not alone. But the eurozone’s inflation rate is now the highest since recordkeeping began in 1997. That is a long view. It puts the current moment in perspective.
Who is affected? Agib answered that question bluntly. “Who isn’t affected?” he said. The question was rhetorical. The answer is obvious. Everyone who buys food, pays rent, or fills a gas tank is affected. Everyone who runs a business that depends on supplies is affected. Everyone who worries about whether their paycheck will stretch to the end of the month is affected.
The war in Ukraine did not create the inflation problem. It made it worse. Energy prices were already rising. Supply chains were already strained. The invasion added a new layer of uncertainty and cost. Now the question is how long this will last. The central bank will decide soon whether to raise rates. That decision will ripple through every economy in the eurozone.
For now, the numbers are clear. Inflation is at 7.5 percent. Energy costs are up 44.7 percent. Food costs are up 5 percent. Those are not just statistics. They are the reality for people like Agib, who must decide tomorrow what to charge for a meal. They are the reality for families who must decide what to cut from their budgets. The record will likely be broken again next month. No one expects prices to fall soon.
