At the onset of the current inflation surge, the euro area economy was hit by a succession of extraordinary adverse supply shocks which pushed inflation far above the ECB’s 2% medium-term target. The COVID-19 lockdowns in 2020 led to the enforced closure of large parts of the economy and a sharp drop in activity levels and inflation. As the consumer goods industry reopened and consumption patterns shifted from contact-intensive services to goods, supply and demand mismatches emerged…
https://www.ecb.europa.eu/press/key/date/2023/html/ecb.sp230707~8f8f9debc6.en.html
