Eurozone: Inflation confirmed at 2.0% in August
September 17, 2018
According to complete data released by Eurostat on 17 September, harmonized inflation came in at 2.0% in August. The result was slightly below July’s 2.1%—the highest reading since February 2017—and matched the preliminary estimate. As a result, inflation now sits just above the European Central Bank’s target rate of near, but below, 2.0%.
The uptick in inflation was chiefly due to a jump in energy costs, on the back of higher global oil prices. In addition, prices for services also rose in August.
Annual average inflation ticked up to 1.6% from 1.5% in July. Meanwhile, core inflation edged down to 1.2% from July’s 1.3%. On a monthly basis, harmonized consumer prices rose 0.2%, contrasting July’s 0.3% fall.
Among the countries in the common-currency bloc, Estonia (3.5%), Slovakia (2.9%) and Latvia (2.8%) experienced the highest inflation. Meanwhile, Ireland and Greece (each at 0.9%) recorded the lowest inflation. Regarding the largest economies in the Eurozone, inflation was stable in France (2.6%) but fell in Spain (2.2%), Germany (1.9%) and Italy (1.6%).
Eurozone Inflation Forecast
FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 1.6% in 2018. For 2019, panelists expect inflation to also average 1.6%.
Author: Christopher Thomas, Economist