Eurozone Inflation


Eurozone: Inflation rises in May, the first increase in six months

June 2, 2015

According to a flash estimate released by Eurostat on 2 June, inflation in the Eurozone—measured by the harmonized index of consumer prices, HICP—rose to 0.3% in May from a flat reading in April. The increase, which overshot the 0.2% rise the markets had expected, was the first in six months. Although inflation in recent months has been in what ECB President Mario Draghi called the “danger zone” of below 1.0%, the increase in inflation is likely to be welcome news for the European monetary policy makers. Month-on-month price variations and a more detailed set of data will be provided on 17 June.

Meanwhile, complete data showed that consumer prices in April rose 0.3% over the previous month, which came in below the 1.1% jump observed in March (April 0.0% year-on-year, March: -0.1% yoy). At a country level, 11 of the 19 Eurozone economies posted annual inflation rates equal to or below the regional average. Greece (-1.8%) Cyprus (-1.7%) and Slovenia (-0.7%) recorded the largest annual decreases in consumer prices. At the other end of the spectrum, Malta (+1.4%), Austria (+0.9%) and Latvia (+0.6%) showed the highest year-on-year increases in harmonized consumer prices. Among the major economies in the Eurozone, inflation rose 0.3% in Germany in April, while in France it rose a timid 0.1%. In Italy, harmonized consumer prices dropped 0.1% over the same month last year, while in Spain they dropped 0.7%.

FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 0.1% in 2015, which is unchanged from last month’s forecast. For 2016, panelists expect inflation to average 1.2%.

Author:, Senior Economist

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Eurozone Inflation Chart

Euro Inflation by country April 2015 1

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

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