Euroland inflation rate: Hardly any movement on the price front

The Euroland inflation rate remained modest in February. The flash estimate shows that the price increase last month was 1.5 percent on the year. In January, the inflation rate had been 1.4 percent. A higher price rise was seen in the energy component and unprocessed foods, whereas the increase in service sector prices waned. Pricing pressures in the domestic economy remain moderate, as the core rate held steady at 1.2 percent. The Eurozone thus continues to be some way away from the ECB’s inflation target of “below but close to 2.0 percent” and this looks set to remain the case for the year as a whole.

At the country level, the economies that have already issued flash estimates on price trends likewise exhibited little upward momentum. In Germany, the Harmonised Index of Consumer Prices (HICP) stayed unchanged at 1.7 percent, in France, the figure edged up from 1.4 to 1.5 percent. Italian consumer prices climbed from 0.9 percent the prior month to 1.2 percent and in Spain they grew from 1.0 to 1.1 percent.

Essentially, in the coming months there will probably not be much movement in Euroland inflation rates. The pricing pressure in the domestic economy remains only modest in light of the weakening economy. There are also no signs of price rises driven by external factors, such as a clearly higher price of crude oil. We expect that in the further course of the year the price of oil will only see slight increases, and these will largely remain below the level of the prior year. EMU consumer price inflation will presumably remain moderate at 1.4 percent, much to the gratification of consumers, even if it leaves the ECB brooding away.

Rate this article

Thank you for your rating. Your vote:
There is no rating yet. Be the first! Current average rating: 0

Leave an answer

Your e-mail address will not be published. Required fields are marked *