Inflation Hits 2.4% in December, Driven by Energy and Services
Eurozone inflation climbed to 2.4% year-on-year in December, according to Eurostat, marking the third consecutive monthly increase. This is the highest level since July, up from 2.2% in November.
The rise was attributed to base effects, as energy costs, which had been declining, edged up by 0.1% in December compared to a -2% drop in November. Services inflation also rose to 4%, up from 3.9% the previous month. However, food, alcohol, and tobacco inflation eased slightly due to falling prices of unprocessed foods, despite increases in processed food and alcohol costs.
Inflation Trends Vary Across Eurozone
- Germany: Inflation climbed to 2.8% in December from 2.4% in November, driven by higher food and energy prices.
- France: Inflation rose to 1.8% from 1.7%, fueled by electricity price hikes.
- Italy: Inflation eased to 1.4% from 1.5%, reflecting lower industrial goods and services prices.
The annual core inflation rate for the Eurozone, which excludes volatile items like energy and food, held steady at 2.7%, matching expectations.
Economic Pressures Continue
Rising energy and services costs remain significant inflation drivers, especially in Germany and France, where supply chain issues and energy tariffs exacerbate pressures. Italy’s inflation decline offers a counterpoint, driven by a drop in industrial goods and services prices.
Despite mixed trends across the region, the persistence of core inflation underscores ongoing challenges for the Eurozone economy.
Inflation Hits 2.4% in December, Driven by Energy and Services
Eurozone inflation climbed to 2.4% year-on-year in December, according to Eurostat, marking the third consecutive monthly increase. This is the highest level since July, up from 2.2% in November.
The rise was attributed to base effects, as energy costs, which had been declining, edged up by 0.1% in December compared to a -2% drop in November. Services inflation also rose to 4%, up from 3.9% the previous month. However, food, alcohol, and tobacco inflation eased slightly due to falling prices of unprocessed foods, despite increases in processed food and alcohol costs.
Inflation Trends Vary Across Eurozone
- Germany: Inflation climbed to 2.8% in December from 2.4% in November, driven by higher food and energy prices.
- France: Inflation rose to 1.8% from 1.7%, fueled by electricity price hikes.
- Italy: Inflation eased to 1.4% from 1.5%, reflecting lower industrial goods and services prices.
The annual core inflation rate for the Eurozone, which excludes volatile items like energy and food, held steady at 2.7%, matching expectations.
Economic Pressures Continue
Rising energy and services costs remain significant inflation drivers, especially in Germany and France, where supply chain issues and energy tariffs exacerbate pressures. Italy’s inflation decline offers a counterpoint, driven by a drop in industrial goods and services prices.
Despite mixed trends across the region, the persistence of core inflation underscores ongoing challenges for the Eurozone economy.