The European Union (EU) fashion industry is slipping fast to another inflationary juggernaut, as the September 2022 figures suggest that the inflation rate for clothing and footwear in the EU was recorded at 4.1 percent against 4.2 percent in September 2021.
It was below 3 percent and sustained at that level between Jan to August 21. Covid-19 closures pushed inflation, particularly the transport cost due to the rising energy prices.
It may be noted that the EU had recorded the highest of 4.4 percent back in 2008.
The inflation data for the month of September has rung alarm bells in the textile hubs in South and Southeast Asia. The export numbers of the textile industry are declining in these regions, which are heavily dependent on their supplies to the EU. Already, both the South and Southeast Asian economies have been dampened due to short of orders from the EU coupled with the internal challenges right from the economic crisis in Sri Lanka to floods in Pakistan.
The World Bank has issued a forecast of a 1 percent downward revision in the regional estimates, which was predicted to be 5.8% back in the month of June 22. A drop in growth would have a dire impact on jobs, current account deficits, and exports of the region.
The EU experts believe that a correction in supply-side hurdles put the growth trajectory back on track. However, the impact of the Russia-Ukraine war is looming large and a defeat of Ukraine in the hands of Russia may play further havoc with the EU economies.
