Since mid-2021, inflation in the euro area has increased at a pace last seen in the 1970s and early 1980s, after having been below the European Central Bank’s (ECB) 2% target for almost a decade.
Rising inflation has mainly been driven by surging energy prices (electricity, gas and other fuels) since the start of 2021. Inflation is expected to decline from an average of 8.4% in 2022 to 6.3% in 2023. It should finally decrease to 2% by the second half of 2025.
