Euro Area: Inflation at near four-year low in April on plunging energy prices

Euro Area Inflation April 2020

Euro Area: Inflation at near four-year low in April on plunging energy prices

Harmonized inflation fell to 0.3% in April from March’s 0.7%, marking the lowest reading since August 2016. Inflation thus moved further below the European Central Bank’s target rate of near, but under, 2.0%. April’s further drop was mainly due to a much sharper fall in energy prices, and to a lesser extent slower price increases for services and non-energy industrial goods. On the other hand, prices for food, alcohol and tobacco rose at a much faster clip than in March, likely due to panic buying and slower deliveries.

On a monthly basis, harmonized prices rose 0.3% in April, following March’s 0.6% increase. Core inflation, which excludes volatile energy and unprocessed foods prices, inched down from 1.2% in March to 1.1% in the fourth month of 2020.

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