Harmonized inflation remains steady in June

Harmonized inflation held steady at May's 0.5% in June. June’s reading marked the joint-weakest inflation rate since December 2020 and the lowest in the Euro area. Looking at the details of the release, a less pronounced decrease in prices for food and non-alcoholic beverages, and housing and utilities largely offset a faster decline in transportation prices. The trend pointed down, with annual average harmonized inflation coming in at 1.6% in June (May: 1.9%). Meanwhile, consumer price inflation edged down to 1.3% in June from May’s 1.5%. Lastly, harmonized consumer prices fell 0.05% from the previous month in June, a more moderate drop than the 0.06% fall recorded in May.

Analysts at the EIU commented: “We forecast that inflation will decelerate in 2024, to 1.4% (below the ECB's 2% target), down from 4.3% in 2023. The worst of the cost-of-living crisis has now abated, and the impact on global trade and oil prices arising from the Israel-Hamas conflict has been largely contained.”

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