Eurozone: Inflation drops to nearly three-year low in October
November 15, 2019
Complete data revealed harmonized inflation fell to 0.7% in October, down from September’s 0.8% and matching the preliminary estimate. The result marked the lowest reading since November 2016. Inflation sits sizably below the European Central Bank’s target rate of near, but under, 2.0%. The reading was chiefly due to a sharper drop in energy prices and easing food, alcohol and tobacco price pressures.
Annual average harmonized inflation inched down to 1.3% in October, from September’s 1.4%. Core inflation, meanwhile, was stable at September’s 1.2% in October. On a monthly basis, harmonized consumer prices rose 0.1% in October, below September’s 0.2% increase.
Among the countries in the common-currency bloc, Cyprus and Portugal experienced dropping harmonized prices on an annual basis. On the flipside, the Netherlands (2.8%) and Slovakia (2.9%) recorded the highest inflation rates. Regarding the largest economies in the Eurozone, harmonized inflation was stable in Germany, Italy and Spain, while it fell in France.
FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 1.3% in 2020. For 2021, panelists expect inflation to average 1.5%.