Eurozone Inflation April 2016


Eurozone consumer prices fall in April

Consumer prices in April returned to negative territory, despite efforts by the European Central Bank to spur inflation. According to a flash estimate released by Eurostat on 29 April, harmonized consumer prices—measured by the harmonized index of consumer prices—fell 0.2% in April. The result followed March’s revised zero growth (previously reported: -0.1% year-on-year) and was in line with market analysts’ expectations.

According to Eurostat, the main contributor to April’s negative reading was energy prices, while prices for food, alcohol and tobacco were broadly stable from the previous month. Core inflation eased from 1.0% in March to 0.7% in April. Month-on-month price variations and a more detailed set of data will be provided on 18 May.

Meanwhile, more complete data showed that harmonized consumer prices rose 1.2% in March over the previous month, which followed the 0.2% increase observed in February. Revised data show that harmonized consumer prices were unchanged annually in March, keeping annual average inflation steady at 0.1%.

Looking at the countries in the common-currency bloc, 11 of the 19 Eurozone economies showed inflation rates equal to or above the regional average. Belgium (1.6%), Malta (1.0%), and Lithuania (0.8%) were the economies with the highest rates. In contrast, Cyprus (-2.1%), Spain (-1.0%) and Slovenia (-1.0%) were the economies that registered the largest annual declines in HICP consumer prices.

Among the largest economies in the Eurozone, consumer prices declined annually in France, Italy and Spain, but swung to an increase in Germany.

FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 0.3% in 2016, which is down 0.1 percentage points from last month’s forecast. For 2017, panelists expect inflation to average 1.4%.

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Eurozone Inflation Chart

Euro Inflation by country March 2016

Note: Year-on-year var. of harmonized consumer price index (HICP) in %.
Source: Eurostat

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