Eurozone Inflation December 2019


Eurozone: Inflation rises further in December

January 7, 2020

Harmonized inflation accelerated to 1.3% in December from November’s 1.0% and therefore marked the highest reading since June 2019, according to a flash estimate released by Eurostat on 7 January. Despite the pick-up, the result is still below the European Central Bank’s target rate of near, but under, 2.0%. December’s acceleration was due to a rebound in energy prices as well as to faster price increases for unprocessed food, while the increase in prices for services moderated marginally.

On a monthly basis, harmonized prices are expected to have risen 0.3% in December, contrasting November’s 0.3% fall. Core inflation, which excludes volatile energy and unprocessed foods prices, was stable at November’s 1.4% in December.

Commenting the inflation print, Bert Colijn, Eurozone senior economist at ING, highlighted:

“Despite a strong increase in inflation […] in December, it’s premature for hawks to get excited. […] Predictions for a sustained rise in core inflation still seem premature, as wage pressures have been moderating recently thanks to the sluggish and uncertain economic environment. The same holds for selling price expectations which have been trending down, indicating that more modest price growth is in the making in the months ahead”.

A complete set of data for harmonized inflation will be released on 17 January.

FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 1.3% in 2020. For 2021, panelists expect inflation to average 1.4%.

Author: Massimo Bassetti, Senior Economist

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Eurozone Inflation Chart

Euro Area Inflation December 2019 0

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

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