Eurozone Inflation Up

By Prensa Latina

Brussels : The Eurozone inflation index hit its highest level in six years due to a rise in oil and food prices, casting a shadow over prospects for European economy in 2008.

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Sources from the European Central Bank revealed that the cost of living in the Eurozone remained at 3.1 percent against 2006.

The ECB has set an inflation target of about two percent in the region in 2008.

ECB economist Sunil Kapadia hopes a further increase in inflation due to higher oil and food prices.

Oil prices increased 50 percent in 2007, exceeding $100 dollars for the first time, and hit a historic record of $100.09 today.

If these very high levels remain in place, they will surely have a negative impact on the economy, said the European Commission spokeswoman for economic issues Amelia Torres.

In its latest forecast, the Commission expects a 2.2 percent growth in the Eurozone this year, following an increase in the Gross Domestic Product of 2.6 percent in 2007.

In Germany, the first economy of the Eurozone, several ministers also recognized that the country’s growth will not reach the two percent expected for this year.