Food price inflation is at least as big a political issue as energy price inflation in CEE
06. 04. 2022 – Lomond
There is, of course, huge concern right across Europe about energy inflation, with prices for consumers having increased by an average of more than 25% in less than a year. That’s just the average – in some countries, the situation is much worse. The fact that there is a direct link between energy prices and the war in Ukraine only adds to the political and media focus on the issue.
Within the EU, consumer energy price inflation doesn’t follow any neat geographical patterns. Every country is affected to some degree, but the countries where the problem is most acute are in different parts of Europe, highlighting the complex range of factors that drive energy costs.
Things are a bit different when it comes to food. Food prices are also affected by a complex range of factors, including rising energy costs, but there are geographical disparities within Europe, as these numbers show very clearly:
So food price inflation has been a bigger issue in CEE than Western Europe for a while. Going back to March 2021, food prices had, since 2015, increased by more than the EU average in all bar two of the 11 member states in the region.
Over the last year, the gap has widened much further, with every single CEE member state experiencing food price inflation above the EU average. Eight of the 11 countries in the region have seen food prices increase by more than 10% in a single year; in Lithuania, Bulgaria, Estonia, Hungary and Latvia, they have increased by more than 13%, well over double the EU average.
That looks bad enough, but the reality is actually even worse because people in CEE spend more on food as a percentage of overall household expenditure than they do in Western Europe:
This obviously compounds the problem and explains why, although the two issues are connected, food price inflation is at least as significant a political problem as energy price inflation in CEE.