Annual inflation in the eurozone slowed to a two-year low of 4.3%
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Annual inflation in 20 eurozone countries slowed to 4.3% in September after 5.2% in August and 5.3% in July, according to preliminary data. assessments Eurostat. This is the lowest value since October 2021.
Prices for food, alcohol and tobacco rose by 8.8%, compared with 9.7% and 10.8% in the past two months. Price growth in the service sector slowed from 5.5% in August to 4.7% in September, in the segment of non-energy industrial goods – from 4.7 to 4.2%. Energy prices rose 5.5% after 6.3% in August.
Among the eurozone countries for which statistics for September are already available, annual inflation reached the highest values in Slovakia (8.9%), Croatia (7.3%) and Slovenia (7.1%). The smallest price increases were recorded in Belgium (0.7%), Greece (2.4%) and Finland (3%). The only country with deflation in September was the Netherlands (-0.3% after +3.4% in August).
Core inflation [показатель, в котором не учитываются цены на энергоресурсы и продовольствие] slowed down in the eurozone to this year’s minimum of 4.5% year on year. In June and July this figure was 5.5%, and in August – 5.3%.
Reuters draws attention to the fact that the decline in core inflation in September became the highest since August 2020. Data published today likely gave the European Central Bank (ECB) reason to believe that it has already raised key rates quite high, the agency believes.
14 September ECB raised all three interest rates by 0.25 percentage points, which was the tenth consecutive increase since July 2022. The rate on main financing operations reached 4.5%, the deposit rate increased to 4%, the rate on margin loans – to 4, 75%, these are the levels of the dot-com crisis of 2000-2001. As Vedomosti wrote, this decision coincided with analysts’ expectations.
The regulator expects inflation to be 5.6% in 2023, 3.2% in 2024, and 2.1% in 2025. The growth of the EU economy in 2023 will slow down to 0.7%, in 2024 it will grow by 1%, in 2025. – by 1.5%, follows from the updated forecast. On September 25, ECB President Christine Lagarde said that the regulator plans keep rates high for an “extended period of time” as this will help eurozone countries bring inflation down to target.
As Vedomosti previously wrote, Western experts increasingly began to express concerns about the risks of stagflation in the eurozone economy, when GDP slows down amid high inflationary pressure.
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