Latest reading: Inflation ticked down to 4.0% in August from July’s 4.3%. August’s figure marked the lowest inflation rate since...
Inflation in Euro Area
The Euro area faced generally low inflation rates over the last decade, often below 2%, reflecting the region's slow economic growth and low inflation expectations. That said, the picture has changed notably since the pandemic: Inflation has exceeded the European Central Bank's 2% from 2021 through 2024, due to the initial rebound in economic activity, global supply pressures, a rise in protectionism and the reduction of Russian gas flows to the bloc.
In the year 2024, the inflation in Euro Area was 2.36%, compared to 0.43% in 2014 and 5.42% in 2023. It averaged 2.21% over the last decade. 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 2024.
Source: Macrobond.
Euro Area Inflation Data
| 2020 | 2021 | 2022 | 2023 | 2024 | |
|---|---|---|---|---|---|
| Inflation (HICP, ann. var. %, aop) | 0.3 | 2.6 | 8.4 | 5.4 | 2.4 |
| Inflation (HICP, ann. var. %, eop) | -0.3 | 5.0 | 9.2 | 2.9 | 2.4 |
| Inflation (PPI, ann. var. %, aop) | -2.6 | 12.2 | 32.7 | -2.1 | -4.2 |
Harmonized inflation holds stable in July
Latest reading: Harmonized inflation came in at 2.0% in July, matching June’s result and the ECB target. Looking at the details of the release, prices for food, alcohol and tobacco rose at a quicker rate in July, while energy prices dropped at a slower pace. That said, price pressures for services eased in June. Annual average harmonized inflation fell to 2.1% in July (June: 2.2%). Meanwhile, core inflation was stable, coming in at June's 2.3% in July. Finally, harmonized consumer prices were flat in July over the previous month, which was below June's 0.31% increase.
Outlook: Our Consensus is for inflation to remain around target throughout the remainder of 2025, tamed by muted oil prices.
Panelist insight: Nomura analysts commented on implications for monetary policy: “In short, we don’t think the slowing in services inflation/price momentum in recent months will be sufficient to generate further rate cuts from the ECB – we recently changed our view to no more cuts (i.e. policy sticking at the 2% depo rate). Moreover, we think GDP growth will improve later this year, from its 0.1% q-o-q pace in Q2 to 0.2?% in Q3, which is stronger than the ECB’s negative view for Q3, also supporting the case for no further monetary easing.”
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 67 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.
Want to get access to the full dataset of European inflation forecasts? Send an email to info@focus-economics.com.
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