Eurozone: Inflation returns meekly in 2016
January 18, 2017
Complete data released by Eurostat on 18 January confirmed that Eurozone harmonized inflation was 1.1% in December, above November’s 0.6% and the highest reading seen since August 2013. The result was in line with the preliminary estimate. According to Eurostat, a sharp rise in energy prices along with an increase in food, alcohol and tobacco prices drove the result. For the year 2016, harmonized inflation averaged 0.2%, after zero inflation was recorded in 2015. Price pressures were weak throughout 2016 due to the low commodity price environment.
Core inflation inched up from 0.8% in November to 0.9% in December. Meanwhile, harmonized consumer prices rose 0.6% in December on a monthly basis, contrasting November’s 0.1% fall.
Looking at the countries in the common-currency bloc, 11 of the 19 Eurozone economies showed inflation rates equal to or above the regional average. Estonia (2.4%), Belgium (2.2%) and Latvia (2.1%) were the economies with the highest rates. Ireland was the only economy to experience falling prices and consumer prices declined 0.2% over the same month of the previous year. Among the largest economies in the Eurozone, Germany saw the highest inflation (1.6%), followed by Spain (1.4%), France (0.8%) and finally Italy (0.6%).