Euro Area Inflation January 2022

Euro Area: Inflation ticks up in January amid faster growth in prices for food and energy

February 2, 2022

Harmonized inflation came in at 5.1% in January, above December’s 5.0% reading and marking the highest print since records began in 1997. Inflation therefore moved further above the European Central Bank’s target rate of 2.0%. January’s result was due to faster increases in prices for food, alcohol and tobacco and for energy. Contrastingly, prices for non-energy industrial goods rose at softer paces, while prices for services increased at the same pace as in December.

On a monthly basis, harmonized consumer prices jumped 0.3% in January, below December’s 0.4% increase. Core inflation, which excludes volatile energy and unprocessed foods prices, dropped to 2.5% in January from December’s 2.7%, which had marked the highest print since August 2008.

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

“With improving expectations for GDP and inflation for 2023 and 2024, that should be enough for an ECB rate hike in early 2023, but it is also important to stress that the eurozone inflation situation is much less acute than the US as second-round effect evidence remains largely lacking. Don’t expect too much from the ECB tomorrow as we could well see President Christine Lagarde disappoint anyone expecting a 2022 rate hike.”

FocusEconomics panelists see inflation averaging 2.9% in 2022, which is unchanged from last month’s estimate, before ticking down to 2.4% in 2023.


Author: Massimo Bassetti, Senior Economist

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Euro Area Inflation Chart


Euro Area Inflation January 2022

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


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