Eurozone: Inflation rises to ECB target in April

Complete data released by Eurostat on 17 May confirmed that harmonized inflation was 1.9% in April, up from March’s 1.5%. The result was in line with the preliminary estimate and is at the European Central Bank’s target of close to, but below 2.0%. According to Eurostat, higher prices for energy and transport drove the result. Annual average inflation rose from 0.7% in March to 0.9% in April, the highest result since May 2014.

Core inflation came in at 1.2% in April, above May’s 0.8%. Meanwhile, harmonized consumer prices rose 0.4% on a monthly basis, below the previous month’s 0.8% increase.

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 (3.6%), Lithuania (3.5%) and Latvia (3.3%) were the economies with the highest rates. On the other side of the spectrum, Ireland (0.7%) had the lowest prices pressures. Among the largest economies in the Eurozone, Spain saw the highest inflation (2.6%), followed by Germany (2.0%) and Italy (2.0%). Meanwhile, inflation was below the region’s average in France (1.4%).

FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 1.7% in 2017, which is up 0.1 percentage points from last month’s forecast. For 2018, panelists also expect inflation to average 1.5%.