Euro Area: Inflation dips in January

Euro Area Inflation January 2024

Euro Area: Inflation dips in January

Harmonized inflation fell to 2.8% in January from 2.9% in December. Therefore, inflation moved somewhat closer to the European Central Bank’s target rate of 2.0%.

January saw softer increases in prices for non-energy industrial goods and food, alcohol and tobacco. Meanwhile, prices for services rose at the same clip as in the previous month, while prices for energy fell at a softer pace. Meanwhile, the annual rate of core inflation—which excludes volatile energy and unprocessed food prices—declined to 3.6% in January from December’s 3.9%.

On a monthly basis, harmonized consumer prices fell 0.36% in January, swinging from December’s 0.16% increase.

Commenting on the release, Bert Colijn, senior economist at ING, stated:

“Energy remains a disinflationary force, though the effect is petering out and will probably disappear completely in the second quarter, as the base effect will become less advantageous. Remember, too, that in several member states, energy support measures, which kept prices lower than the market price for the consumer last year, are now gradually falling away.”

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