Euro Area: Inflation rises in June
Harmonized inflation rose to 0.3% in June from May’s nearly four-year low of 0.1%, according to a second estimate released by Eurostat on 17 July. Inflation thus moved closer to the European Central Bank’s target rate of near, but under, 2.0%. June’s acceleration was due to a softer fall in energy prices. On the other hand, prices for services and for food, alcohol and tobacco rose at a somewhat slower clip than in May. Meanwhile, the increase in prices for non-energy industrial goods was stable.
On a monthly basis, harmonized prices climbed 0.3% in June, contrasting May’s 0.1% fall. Core inflation, which excludes volatile energy and unprocessed foods prices, inched down to 1.1% from May’s 1.2%.
Commenting on the release, Bert Colijn, Eurozone senior economist at ING, stated:
“Overall, as unemployment is set to continue to rise in the months ahead and output remains well below the 4Q19 levels for a long time to come, inflation is unlikely to move anywhere close to the European Central Bank’s target of just below 2% in the near term.”