Monday, December 11, 2023

Inflation in Europe reached its lowest level since October 2021

Annual inflation in the euro area fell to its lowest level since October 2021, falling to 4.3% in September, figures showed on Friday. This is lower than the annual reading of 5.2% in August, while month-on-month inflation fell from 0.5% to 0.3%.

Core inflation, which excludes energy, food, alcohol and tobacco, which is evaluated with the interest of monetary authorities, fell to 4.5% year-on-year in September from 5.3% in August.

This decline in inflation increased after the European Central Bank decided to raise interest rates to a record level in September, setting its key rate at 4%.

The move was described as a “moderate increase” after the ECB also gave its strongest proposal even though the governing council felt that rates could be raised at a high level to return inflation to the target in the medium term. .

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The bank’s latest macroeconomic projections for the euro area expect inflation to be 5.6% this year, falling to 3.2% in 2024 and 2.1% in 2025.

Officials tried to dampen expectations of rate cuts on the horizon, with French central bank Governor Francois Villeroy de Galhau saying it was “premature” to bet on when the first would happen. cutting

The outlook remains complex: the ECB predicts strong economic growth of 0.7% for the bloc this year, followed by 1% and 1.5% in the next two years. The recent rise in oil prices may also pose a risk to the bank’s inflation forecasts.

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The inflationary scenario continues to vary greatly among European countries. Annual inflation in Germany, the euro zone’s largest economy, remains above the 4.3% target as it also battles an economic slowdown.

Estimates from Eurostat, the EU’s statistics agency, put harmonized headline inflation across all eurozone countries at 5.6% in France and 3.2% in Spain for September, while Slovakia and Slovenia suffered inflation of 8.9% and 7.1%.

Nation World News Desk
Nation World News Desk
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