Eurozone: Inflation slows to lowest level in nearly four years
November 15, 2013
The harmonized index of consumer prices (HICP) fell 0.1% over the previous month in October, which contrasted the 0.5% increase recorded in September. Annual headline inflation fell from 1.1% in September to 0.7% in October - the lowest reading since November 2009 - and annual average inflation inched down from 1.7% in September to 1.6% in October.
The core inflation index, which does not include prices for energy, rose 0.1% over the previous month (September: +0.6% month-on-month). Annual core inflation fell from 1.2% in September to 1.0% in October.
At a country level, 11 of the 17 Eurozone economies posted annual inflation rates equal to or above the regional average. Estonia (2.2%) and the Finland (1.7%) recorded the highest annual inflation rates. At the other end of the spectrum, Greece experienced a 1.9% year-on-year drop in harmonized consumer prices. According to EL.STAT data released on 6 November, Greece's non-harmonized measure of consumer prices fell 2.0% in October over the same month last year, marking the biggest deflation in at least 50 years. Among the major economies in the Eurozone, inflation was above the regional average in Germany (1.2%) and in Italy (0.8%), whereas it was in line with the average in France (0.7%) and below average in Spain (0.0%).
FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 1.5% in 2013, which is unchanged from last month's forecast. For 2014, panelists expect inflation to average 1.5%.
Author: Armando Ciccarelli, Head of Data Solutions