Eurozone Inflation August 2019


Eurozone: Inflation steady in August at over two-year low

September 18, 2019

Complete data confirmed harmonized inflation was unchanged at July’s 1.0% in August, matching the preliminary estimate of and marking the lowest reading since November 2016. Inflation sits sizably below the European Central Bank’s target rate of near, but under, 2.0%. The reading was chiefly due to a drop in energy prices which was balanced out by higher price pressures for food, alcohol and tobacco.

Annual average harmonized inflation inched down to 1.5% in August, from July’s 1.6%. Core inflation, meanwhile, was unchanged at 1.1%. On a monthly basis, harmonized consumer prices rose 0.1% in August, contrasting July’s 0.5% drop.

Among the countries in the common-currency bloc, Portugal experienced the weakest price pressures with harmonized prices falling 0.1% on an annual basis. On the flipside, the Netherlands and Latvia recorded the highest inflation (3.1%). Regarding the largest economies in the Eurozone, inflation fell in Germany and Spain, but rose in Italy and the Netherlands. Price pressures were unchanged in France.

FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 1.3% in 2019. For 2020, panelists expect inflation to average 1.4%.

Author: Angela Bouzanis, Lead Economist

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