Eurozone Inflation August 2016


Eurozone price pressures stable in August

More complete data released by Eurostat on 15 September confirmed that harmonized inflation came in at 0.2% in August, unchanged from July’s reading. The result was in line with the preliminary estimate. According to Eurostat, the main contributor to August’s reading was higher prices for restaurants and cafes while the largest negative impacts came from prices for fuels, heating oil and gas.

Core inflation rested at July’s 0.8% in August. In addition, annual average inflation was steady at July’s 0.1%. Meanwhile, harmonized consumer prices increased 0.1% in August on a monthly basis, which contrasted July’s 0.6% fall.

Looking at the countries in the common-currency bloc, 10 of the 19 Eurozone economies showed inflation rates equal to or above the regional average. Belgium (2.0%), Estonia (1.1%) and Malta (1.0%) were the economies with the highest rates. In contrast, Slovakia (-0.8%), Cyprus (-0.6%) and Ireland (-0.4%) 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 Italy (-0.2%) and Spain (-0.3%). Meanwhile, inflation was broadly steady in France (0.4%) and Germany (0.3%).

FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 0.3% in 2016, which is unchanged from last month’s forecast. For 2017, panelists expect inflation to average 1.3%.

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Eurozone Inflation Chart

Euro Inflation by country August 2016

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

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