Inflation in Euro Area
The Euro area faced low inflation rates from 2013 to 2022, often below 2%, reflecting the region's slow economic growth and low inflation expectations. Despite the European Central Bank's efforts to stimulate inflation through various monetary policy tools, including quantitative easing and negative interest rates, inflation remained subdued. That said, in the wake of the pandemic inflation surged to record highs, due to global supply constraints, a strong bounce-back in economic activity and the cutoff of Russian gas flows to the bloc.
Harmonized consumer price inflation averaged 1.8% in the ten years to 2022. The 2022 average figure was 8.4%. For more inflation information, visit our dedicated page.
Euro Area Inflation Chart
Note: This chart displays Inflation (HICP, ann. var. %, aop) for Euro Area from 2013 to 2022.
Source: EUROSTAT.
Euro Area Inflation Data
| 2018 | 2019 | 2020 | 2021 | 2022 | |
|---|---|---|---|---|---|
| Inflation (HICP, ann. var. %, aop) | 1.8 | 1.2 | 0.3 | 2.6 | 8.4 |
| Inflation (HICP, ann. var. %, eop) | 1.5 | 1.3 | -0.3 | 5.0 | 9.2 |
| Inflation (PPI, ann. var. %, aop) | 3.3 | 0.6 | -2.6 | 12.3 | 34.3 |
Inflation falls more than expected in October
Harmonized inflation fell to 2.9% in October from 4.3% in September. The print represented the lowest rate since November 2021 and surprised markets on the downside. That said, inflation remained stuck above the European Central Bank’s target rate of 2.0%. October saw weaker increases in prices for non-energy industrial goods, services and food, and alcohol and tobacco. Moreover, prices for energy declined at a sharper pace. Meanwhile, the annual rate of core inflation—which excludes volatile energy and unprocessed food prices—declined to 5.0% in October from September’s 5.5%. On a monthly basis, harmonized consumer prices rose 0.09% in October—well under 2.0% annualized—below September’s 0.32% increase.
Commenting on the outlook, Bert Colijn, senior economist at ING, stated: “The numbers start to point to a much better inflation environment, especially now that the economy is clearly performing much weaker than last year and most of the impact of recent hikes is still in the pipeline.”
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects European inflation projections for the next ten years from a panel of 66 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable inflation forecast available for European inflation.
Download one of our sample reports to visualize what a Consensus Forecast is and see our European inflation projections.
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