Inflation had peaked in October, at 10.6%, after a year and a half of uninterrupted rise. franz massard / stock.adobe.com
Economists had however anticipated a less marked drop, relying instead on inflation of 9%.
The annual inflation rate in the euro zone fell in January for the third consecutive month, to 8.5%, after 9.2% in December, thanks to the continued lull in energy prices, announced Eurostat on Wednesday. The fall in inflation is more marked than what economists anticipated. Experts polled by Factset on average expected consumer prices to rise 9% in January. The rise in consumer prices had reached its peak in October, at 10.6%, after a year and a half of uninterrupted growth, accelerated by the war in Ukraine.
As in November and December, the slowdown in inflation last month is mainly explained by lower price increases in the energy sector (electricity, gas, oil, etc.), the basis of comparison for the year being already very high. This component of the index remains the one with the highest annual growth rate in January, but it fell sharply to 17.2%, after 25.5% in December, according to the European statistics office. In October, the increase in energy prices reached an average of 41.5% in the euro zone. On the other hand, soaring food prices (including alcohol and tobacco) continued to accelerate to 14.1% in January, after 13.8% in December. Same trend for the prices of industrial goods which increased by 6.9% over one year, ie 0.5 points more than in December. In services, inflation slowed slightly to 4.2% (-0.2 points).
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Among the 20 eurozone countries, the lowest inflation rates in January were recorded in Spain and Luxembourg, both at 5.8%. France (7%) is one of the best-off countries, doing much better than Italy (10.9%). Germany’s figure was not available. As in previous months, inflation was highest in the Baltic countries, Latvia (21.6%), Estonia (18.8%) and Lithuania (18.4%), according to harmonized data from Eurostat.
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