Eurozone Inflation


Eurozone: Inflation remains in “danger zone” in June

July 17, 2014

According to the data released by Eurostat on 17 July, the harmonized index of consumer prices (HICP) rose 0.1% over the previous month. The reading contrasted the 0.1% drop recorded in May.

Annual headline inflation was stable at May’s 0.5%. There are still concerns that persistent low inflation may cripple the incipient recovery, as inflation was in what ECB President Mario Draghi called the “danger zone” of below 1.0% for the ninth consecutive month. Annual average inflation inched down from 0.9% in May to 0.8% in June, which is the lowest level that has been recorded since June 2010.

The core inflation index, which does not include prices for energy, rose 0.1% over the previous month (May: -0.1% month-on-month). Annual core inflation was stable at May’s 0.8%.

At a country level, 10 of the 18 Eurozone economies posted annual inflation rates equal to or above the regional average. Austria (1.7%) and Luxembourg (1.2%) recorded the highest annual inflation rates. At the other end of the spectrum, Greece and Portugal experienced year-on-year decreases in harmonized consumer prices (-1.5% and -0.2% respectively). Among the major economies in the Eurozone, inflation was above the regional average in Germany (1.0%) and France (0.6%), whereas it was below average in Italy (0.2%) and Spain (0.0%).

FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 0.9% in 2014, which is unchanged from last month’s forecast. For 2015, panelists expect inflation to average 1.3%.

Author:, Head of Data Solutions

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Eurozone Inflation Chart

Euro Inflation by country June 2014

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

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