FRANKFURT – Eurozone growth slowed in the first quarter while inflation hit a fresh record high in April, data released by the EU statistics agency showed Friday, stoking fears of stagflation.
Economic growth slowed to 0.2 percent on the quarter from 0.3 percent in the final three months of last year. On the year, eurozone growth was up 5.0 percent.
Looking ahead, uncertainty caused by the war in Ukraine, which started toward the end of the first quarter, as well as surging inflation are expected to further weigh on growth.
Inflation accelerated further to 7.5 percent in April from 7.4 percent in the previous month. High prices continue to be driven primarily by energy costs, which were up 38 percent on the year. Core inflation, which excludes the volatile factors of food and energy, accelerated from 3.2 percent to 3.9 percent — suggesting that high prices are becoming more entrenched.