Eurozone Inflation January 2020


Eurozone: Inflation rises further in January

January 31, 2020

Harmonized inflation inched up to 1.4% in January from December’s 1.3% and therefore marked the highest reading since February 2019, according to a flash estimate released by Eurostat on 31 January. Despite the pick-up, the result is still below the European Central Bank’s target rate of near, but under, 2.0%. January’s increase was due to a marked acceleration in energy prices as well as to faster price increases for food, alcohol and tobacco, while the increase in prices for services moderated.

On a monthly basis, harmonized prices are expected to have dropped 1.0% in January, contrasting December’s 0.3% increase. Core inflation, which excludes volatile energy and unprocessed foods prices, was ticked down from 1.4% in December to 1.3% in the first month of 2020.

Commenting on the release, Bert Colijn, Eurozone senior economist at ING, stated:

“A reading just over 1% seems to be in line with the current economic situation, which means that any excitement among hawks at the higher core rate of the past two months has been premature. The ECB is on autopilot for the moment and these inflation numbers confirm that quite clearly.”

A complete set of data for harmonized inflation will be released on 21 February.

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, Economist

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Eurozone Inflation Chart

Euro Area Inflation January 20 20

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

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