Eurozone: Inflation hits highest level since February 2017
August 17, 2018
According to complete data released by Eurostat on 17 August, harmonized inflation came in at 2.1% in July—the highest reading since February 2017. The result was slightly above June’s 2.0% and matched the preliminary estimate. As a result, inflation now sits further 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 prices, on the back of high global oil prices. In addition, prices for services also rose in July.
Annual average inflation was steady at June’s 1.5% in July. Meanwhile, core inflation edged up to 1.3% from June’s 1.2%. On a monthly basis, harmonized consumer prices fell 0.3% in July, contrasting June’s 0.1% increase.
Among the countries in the common-currency bloc, Estonia (3.3%), Belgium (2.7%) and Latvia (2.7%) experienced the highest inflation. Meanwhile, Ireland (1.0%) and Greece (0.8%) recorded the lowest inflation. Regarding the largest economies in the Eurozone, inflation rose in France (2.3%) and Italy (1.9%) in July, but was unchanged in Germany (2.0%) and Spain (2.3%).
Eurozone Inflation Forecast
FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 1.6% in 2018, which is unchanged from last month’s forecast. For 2019, panelists expect inflation to also average 1.6%.