Eurozone Inflation Rate Rises Unexpectedly
London, 31 July 2024
Preliminary estimates showed that the annual inflation rate in the Euro Area surprisingly increased from 2.5% in June to 2.6% in July 2024, defying expectations that it would decline to 2.4%.
Energy prices grew by 1.3%, significantly more than the 0.2% increase in June. The cost of industrial goods that are not energy-related increased at a faster rate (0.8% vs. 0.7%). But, for the first time in three months, inflation decreased for services (4% vs. 4.1%), and for food, drink, and tobacco (2.3% vs. 2.4%). Inflation decreased to 2.7% from 2.8% when energy was excluded.
In contrast to projections of 2.8%, the core rate—which does not include the cost of food, energy, alcohol, or tobacco—remained stable at 2.9%. Among the biggest economies in the union, inflation decreased in Spain (2.9% vs 3.6%), but increased in Germany (2.6% vs 2.5%), France (2.6% vs 2.5%), and Italy (1.7% vs 0.9%).
Forecast
In July 2024, the Euro Area's inflation rate rose from 2.50 percent in June to 2.60 percent. By the end of this quarter, the Euro Area's inflation rate is predicted by Trading Economics global macro models and analysts to be 2.20 percent. Our econometric models predict that in 2025, the Euro Area Inflation Rate will likely hover around 2.10 percent.
(Source: Trading Economics)
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