Eurozone Inflation July 2019


Eurozone: Inflation falls to over two-year low in July

August 19, 2019

Complete data revealed harmonized inflation fell to 1.0% in July from June’s 1.2%, a notch below the preliminary estimate of 1.1% and marking the lowest reading since November 2016. Inflation sits sizably below the European Central Bank’s target rate of near, but under, 2.0%. The low reading further fuels expectations that the ECB will unveil fresh monetary stimulus at its September meeting. Lower inflationary pressures for energy and services drove the decline.

Annual average harmonized inflation inched down to 1.6% in July, from June’s 1.7%. Core inflation, meanwhile, dropped to 1.0% (June: 1.3%). On a monthly basis, harmonized consumer prices fell 0.5% in July, contrasting June’s 0.2% rise.

Among the countries in the common-currency bloc, Portugal experienced the weakest price pressures with harmonized prices falling 0.7% on an annual basis. On the flipside, Slovakia (3.0%) recorded the highest inflation. Regarding the largest economies in the Eurozone, inflation fell in Germany, France, Italy and the Netherlands but was unchanged in Spain in July.

FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 1.3% in 2019. For 2020, panelists expect inflation to average 1.4%.

Author: Angela Bouzanis, Lead Economist

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Eurozone Inflation Chart

Euro Area Inflation July 2019 0

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

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