Eurozone Inflation


Inflation slows to lowest level in four months

According to a flash estimate released by Eurostat on 30 August, the harmonized index of consumer prices (HICP) added 1.3% in August over the same month last year. The reading was down from July's rate of 1.6% and marks the slowest rate of inflation in four months. Month-on-month price variations and a more detailed set of data will be provided on 16 September.

Meanwhile, in July, consumer prices declined 0.5% over the previous month, which contrasted the 0.1% increase recorded in June. Annual headline inflation in July remained at June's rate of 1.6%. Annual average inflation was stable at 2.0%, as also recorded in June.

The core inflation index, which does not include prices for energy, fell 0.7% over the previous month (June: +0.1% month-on-month). Annual core inflation was unchanged at June's 1.3%.

At a country level, ten of the 17 Eurozone economies posted annual inflation rates equal to or above the regional average. Estonia (3.9%) and the Netherlands (3.1%) recorded the highest annual inflation rates. At the other end of the spectrum, Greece experienced a 0.5% year-on-year drop in consumer prices. Among the major economies in the area, inflation was above the regional average in Germany (1.9%) and Spain (1.9%), whereas it was below the average in France (1.2%) and Italy (1.2%).

FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 1.5% in 2013, which is unchanged from last month's forecast. For 2014, panellists expect inflation to average 1.5%.

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Euro Inflation August 2013

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