In January, energy became cheaper in the euro area by 6.3 percent from a year ago.
Consumer prices price increase, i.e. inflation, slowed down a bit in the euro area in January.
According to preliminary data from Eurostat, the European Union's Statistical Centre, inflation was 2.8 percent in January. In a survey by the news agency Bloomberg, economists estimate that inflation has slowed to 2.7 percent.
On the other hand, compared to December, prices fell by 0.4 percent in January.
Energy became cheaper in January by 6.3 percent compared to the same time last year. Unprocessed foodstuffs became more expensive by 7.0 percent, industrial products by 2.0 percent and services by 4.0 percent.
Economists and core inflation, closely monitored by central banks, was 3.3 percent in January, compared to 3.4 percent in December.
Core inflation is an important measure because the direct impact of sensitively changing energy and food on consumer prices has been removed from it. Therefore, it gives a better indication of the broad scope of inflation.
According to the price stability objective of the European Central Bank (ECB), inflation in the euro area should be two percent in the medium term.
The slowdown in inflation in January is positive news for it, but an easing of monetary policy can hardly be expected in the next few months.
Central bank is concerned about salary increases, which are reflected especially in the service industries.
Director general Christine Lagarde did not give any hint last week about the start of interest rate cuts. Last week, however, he estimated that interest rate cuts will start in the summer rather than the spring.
“The steady slowdown in core inflation continued in January, which is positive news. In the service sectors, inflation remained unchanged, and at least there are no signs yet that wage increases have accelerated inflation,” says the Head of Forecasting at the Institute for Economic Research Päivi Puonti.
He believes that the central bank will start calculating the key interest rates in June, when it will have the latest data on the development of wages at the beginning of the year.
In January the rise in prices was fastest in the euro area in Estonia and Croatia.
In Estonia, that inflation was 5.0 percent and in Croatia 4.8 percent. Inflation was slowest in Finland, where consumer prices rose by 0.7 percent from a year ago.
Among the largest national economies, inflation was 3.1 percent in Germany, 3.4 percent in France and 0.9 percent in Italy.
Half past one In the course of the year, despite everything, inflation has slowed considerably. It was at its peak in October 2022, when prices rose by 10.6 percent from a year ago.
The main reasons for the slowdown in more than a year are the tightening of monetary policy and the easing of the energy crisis and international supply disruptions.
The central bank started aggressive interest rate hikes in July 2022. It raised key interest rates ten times in a row until mid-September last year.
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