DECRYPTION – This word, well known to economists, but less so to the general public, touches us in our daily lives.
It is a dangerous cocktail that could threaten the European economy. The war in Ukraine caused a spike in energy prices, leading to inflation of 7.5% in the euro zone – unheard of for 25 years – coupled with near-zero growth (0.2% in the first quarter ). The combination of the two phenomena raises the threat of “stagflation” in Europe as in France. A technical term well known to economists, but much less so to the general public.
Read alsoThe conflict in Ukraine could plunge Europe into severe stagflation
“Stagflation” is the contraction of “stagnation” and “inflation”. The phenomenon generally occurs after a shock that affects company production, prices and employment. This was particularly the case in the early 1970s when the oil crisis occurred, which we compare to the current economic situation. Are the euro zone in general and France in particular really in stagflation? The latest indicators published by INSEE, eight days ago, do indeed raise fears of the onset of stagflation …
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