Energy price transmission pressure emerges, Eurozone inflation may temporarily exceed central bank targets

Golden Ten Data reported on March 3 that KFW Research economist Stephanie Schoenwald pointed out in a report that, considering the situation in the Middle East, the eurozone inflation rate will not remain below the European Central Bank's target level for a long time. In February, the eurozone inflation rate was 1.9%, higher than January's 1.7%, and slightly below the ECB's target. Schoenwald stated: "In particular, rising oil prices will quickly be passed on to consumers and lead to a significant increase in fuel prices in March." However, she believes the ECB does not need to take urgent action, as the current energy price shock is not comparable to the price surge in 2022. She noted: "As long as inflation expectations remain stable, the ECB can tolerate a temporary rise in the inflation rate by a few tenths of a percentage point."