Eurozone Inflation November 2019

Eurozone

Eurozone: Inflation rises more than expected in November

November 29, 2019

According to a preliminary estimate released by Eurostat on 29 November, harmonized inflation accelerated to 1.0% in November from October’s 0.7%, which had marked the lowest reading since November 2016. The result surprised market analysts on the upside but is still far below the European Central Bank’s target rate of near, but under, 2.0%. November’s acceleration due to faster price increases in all subcomponents of the index—especially for services—except for energy.

On a monthly basis, harmonized prices are expected to have fallen 0.3% in November, contrasting October’s 0.1% uptick. Core inflation, which excludes volatile energy and unprocessed foods prices, sped up to 1.5% in November from October’s 1.2%.

Commenting the stronger-than-expected inflation print, Bert Colijn, Eurozone senior economist at ING, highlighted:

“The question is whether this is the start of a more sustained increase. […] We would need to see much more optimism among businesses or substantially higher wage growth to see inflation rise sustainably”.

A complete set of data for harmonized inflation will be released on 18 December.

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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Euro Area Inflation November 2019

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


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