Eurozone Inflation May 2017


Eurozone: Inflation falls in May

June 16, 2017

Complete data released by Eurostat on 16 May confirmed that harmonized inflation was 1.4% in May, down from April’s 1.9%. 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, lower prices for telecommunications, clothing and social protection had the largest downward influence on inflation, while higher prices for transport had the biggest positive impact. Annual average inflation rose from 0.9% in April to 1.0% in May, the highest result since April 2014.

Core inflation came in at 1.0% in May, above April’s 0.9%. Meanwhile, harmonized consumer prices were flat on a monthly basis, after rising 0.5% in the previous month.

Looking at the countries in the common-currency bloc, 12 of the 19 Eurozone economies showed inflation rates equal to or above the regional average. Estonia (3.5%), Lithuania (3.2%) and Latvia (2.7%) were the economies with the highest rates. On the other side of the spectrum, Ireland (0.0%) had the lowest prices pressures. Among the largest economies in the Eurozone, Spain saw the highest inflation (2.0%), followed by Italy (1.6%) and Germany (1.4%). Meanwhile, inflation was below the region’s average in France (0.9%).

FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 1.7% in 2017, which is unchanged from last month’s forecast. For 2018, panelists expect inflation to average 1.5%.

Author: Angela Bouzanis, Senior Economist

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Eurozone Inflation Chart

Euro Inflation by country May 2017

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

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