Does Inflation hit the Poor hardest Everywhere?

Reducing poverty and improving equity
Dec 20, 2022 | Bruegel

Low-income households suffer most from high inflation, but in some European Union countries the inflation burden is felt more equally than others. Grégory Claeys Conor McCaffrey Lennard Welslau find that in most countries, high inflation leads to worse effects for low-income households, but the situation varies significantly across Europe. Each country has experienced its own confluence of contributing factors, including varying consumption patterns, price changes and national policies. The authors’ analysis for Bruegel shows that in countries that have recently experienced the highest rates of inflation, low-income groups face a much higher inflation rate than high-income groups. In October 2022, Latvia, Hungary, Lithuania and Estonia all experienced very high inflation as well as high inflation inequality.

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