Eurozone Inflation June 2017

Eurozone

Eurozone: Inflation falls in June

July 17, 2017

Complete data released by Eurostat on 17 July confirmed that harmonized inflation was 1.3% in June, down from May’s 1.4%. The result was in line with the preliminary estimate and is below the European Central Bank’s target of close to, but below 2.0%. According to Eurostat, prices for food, alcohol and tobacco as well as energy rose at a slower pace in June, driving easing price pressures. Annual average inflation inched up from 1.0% in May to 1.1%, the highest result since March 2014.

Core inflation came in at 1.2% in June, above May’s 1.0%. Meanwhile, harmonized consumer prices were flat on a monthly basis, after falling 0.1% in the previous month.

Looking at the countries in the common-currency bloc, the Baltics had the highest price pressures with inflation of 3.1% in Estonia and Latvia and 3.5% in Lithuania. On the other side of the spectrum, prices fell on an annual basis in Ireland, declining 0.6%. Regarding the largest economies in the Eurozone, Spain saw the highest inflation (1.6%), followed by Germany (1.5%). Meanwhile, inflation was below the region’s average in France (0.8%) and Italy (1.2%).

FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 1.6% in 2017, which is down 0.1 percentage points from last month’s forecast. For 2018, panelists expect inflation to average 1.5%.


Author: Angela Bouzanis, Senior Economist

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