Economy Inflation in the eurozone falls significantly to 2.2 percent
Inflation in the eurozone weakened noticeably in August. It thus reached its lowest level for three years.
30.08.2024, 11:40
30.08.2024, 11:46
SDA
Consumer prices rose by 2.2 percent compared to the same month last year, according to an initial estimate released by the statistics office Eurostat in Luxembourg on Friday. The last time the inflation rate was this low was in summer 2021.
The significant decline in inflation can be explained by the development of energy prices, which fell significantly year-on-year in August. Here, Eurostat reports a decline of 3.0%, while prices for food, beverages and services have risen.
Inflation stubbornly persistent of late
On average, analysts had expected the significant fall in inflation. After inflation tended to weaken last year, in some cases significantly, inflation has proved to be stubborn in recent months. In July, it even rose slightly to 2.6 percent.
Core inflation, excluding volatile prices for energy, food and luxury foods, also fell in August, but only slightly by 0.1 percentage points to 2.8%. Core inflation reflects the underlying inflation rate and, in the opinion of many economists, represents the inflation trend better than the overall rate.
The inflation rate for the eurozone has thus come closer to the European Central Bank's (ECB) target of two percent in the medium term. In June, the ECB cut interest rates for the first time since the great wave of inflation.
At the interest rate meeting in July, the monetary authorities kept key interest rates stable and made it clear that future interest rate moves would depend on the development of economic data. The financial markets are firmly expecting the ECB to cut interest rates again in September.
