Eurozone: Inflation slows to lowest level in over four years
January 31, 2014
According to a flash estimate Eurostat released on 31 January, the harmonized index of consumer prices (HICP) added 0.7% in January over the same month last year. The reading was down from December's 0.9% increase and marks the lowest reading since October 2009. Month-on-month price variations and a more detailed set of data will be provided on 24 February.
In December, consumer prices rose 0.4% over the previous month, which contrasted the 0.1% drop recorded in November. Annual headline inflation was stable at November's 0.9%. Annual average inflation inched down from 1.5% in November to 1.4% in December.
The core inflation index, which does not include prices for energy, rose 0.2% over the previous month (November: 0.0% month-on-month). Annual core inflation inched down from 1.1% in November to 0.9% in December.
At a country level, 9 of the 18 Eurozone economies posted annual inflation rates equal to or above the regional average. Estonia (2.0%) and Austria (also 2.0%) recorded the highest annual inflation rates. At the other end of the spectrum, Greece experienced a 1.8% year-on-year drop in harmonized consumer prices. Among the major economies in the Eurozone, inflation was above the regional average in Germany (1.2%), whereas it was below average in France (0.8%), Italy (0.7%) and Spain (0.3%).
FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 1.1% in 2014, which is unchanged from last month's forecast. For 2015, panelists expect inflation to average 1.4%.
Author: Armando Ciccarelli, Head of Data Solutions