Euro Area Inflation

Euro Area Inflation

Euro Area Inflation

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 2014 to 2023.

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 dips in January

Harmonized inflation fell to 2.8% in January from 2.9% in December. Therefore, inflation moved somewhat closer to the European Central Bank’s target rate of 2.0%. January saw softer increases in prices for non-energy industrial goods and food, alcohol and tobacco. Meanwhile, prices for services rose at the same clip as in the previous month, while prices for energy fell at a softer pace. Meanwhile, the annual rate of core inflation—which excludes volatile energy and unprocessed food prices—declined to 3.6% in January from December’s 3.9%. On a monthly basis, harmonized consumer prices fell 0.4% in January, swinging from December’s 0.2% increase.

Commenting on the release, Bert Colijn, senior economist at ING, stated: “Energy remains a disinflationary force, though the effect is petering out and will probably disappear completely in the second quarter, as the base effect will become less advantageous. Remember, too, that in several member states, energy support measures, which kept prices lower than the market price for the consumer last year, are now gradually falling away.”

Consensus Forecasts and Projections for the next ten years

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 65 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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