Eurozone Inflation

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Eurozone: Annual fall in consumer prices moderates in February

March 2, 2015

Preliminary data published by Eurostat on 2 March showed that the harmonized index of consumer prices (HICP) in February fell 0.3% over the same month last year. The result followed the 0.6% year-on-year drop observed in January and marked a third consecutive month in negative territory, sparking fears that the Euro area could fall into a sustained period of falling prices. Persistent deflation may cripple the economic recovery and inflation has now been in what ECB President Mario Draghi called the “danger zone” of below 1.0% for the 16th consecutive month. Month-on-month price variations and a more detailed set of data will be provided on 17 March.

According to more detailed data, consumer prices plummeted in January 1.6% over the previous month, which came in well below the 0.1% drop observed in December. Consumer prices fell 0.6% over the same month last year in January, which followed the 0.2% drop tallied in December.

At a country level, 8 of the 19 Eurozone economies posted annual inflation rates equal to or below the regional average. Greece (-2.8%) and Spain (-1.5%) recorded the lowest annual inflation rates. At the other end of the spectrum, Malta (+0.8%) and Austria (+0.5%) showed the highest year-on-year increases in harmonized consumer prices. Among the remaining major economies in the Eurozone, inflation was a notch above the regional average. In Germany and Italy consumer prices fell 0.5% annually in January and in France prices dropped 0.4% over the same month last year in January.

FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 0.0% in 2015, which is down 0.1 percentage points from last month’s forecast. For 2016, panelists expect inflation to average 1.1%.


Author:, Senior Economist

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Eurozone Inflation Chart


Euro Inflation by country January 2015

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


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