Inflation in the eurozone eased back to 2.5 percent in June
After a slight increase in the previous month, inflation in the Eurozone decreased to 2.5% in June, according to a preliminary estimate by EU statistics office Eurostat in Luxembourg on Tuesday. Inflation was unchanged for services in June.
Prices for services increased by 4.1% compared to the previous year in June. Prices for food, alcohol, and tobacco saw a slight decrease in price increase from 2.6% to 2.5%.
Preliminary data suggests that energy product prices rose slightly by 0.2%. However, they had been decreasing in the previous year-on-year comparison due to high energy prices in the past two years following the Russian attack on Ukraine.
Germany had an average inflation rate of 2.5% among the 21 Euro countries. Eurostat uses a different calculation method for international comparability than the German Statistical Federal Office. The latter had estimated the inflation rate in Germany to be 2.2% in June.
Belgium had the highest inflation rate in the Eurozone in June at 5.5%, followed by Spain (3.5%), the Netherlands and Croatia (both 3.4%). Finland reported a low inflation rate of 0.6%, Italy 0.9%, and Lithuania 1.0%.
The decreasing inflation could pave the way for further interest rate cuts by the European Central Bank (ECB) in the medium term. The ECB lowered interest rates for the first time in almost five years by 0.25 percentage points at the beginning of June. However, some experts criticized the decision, arguing it came too early.
The 2.5% inflation rate in June for the Eurozone, as reported by Eurostat, is lower than the 2.2% estimated by the German Statistical Federal Office using a different calculation method. U-Statistics Office data shows that Belgium had the highest inflation rate within the Eurozone during June, at 5.5%. The decreased inflation rate could potentially lead to additional interest rate reductions by the European Central Bank in the near future.
