Latest reading: Inflation fell to 19.8% in May from April’s 22.2%, marking a near two-year low. Resumed Central Bank intervention...
Inflation in Euro Area
The Euro area faced generally low inflation rates over the last decade, often below 2%, reflecting the region's slow economic growth and low inflation expectations. That said, the picture has changed notably since the pandemic: Inflation has exceeded the European Central Bank's 2% from 2021 through 2024, due to the initial rebound in economic activity, global supply pressures, a rise in protectionism and the reduction of Russian gas flows to the bloc.
In the year 2024, the inflation in Euro Area was 2.36%, compared to 0.43% in 2014 and 5.42% in 2023. It averaged 2.21% over the last decade. For more inflation information, visit our dedicated page.
Euro Area Inflation Chart
Note: This chart displays Inflation (HICP, ann. var. %, aop) for Euro Area from 2014 to 2024.
Source: Macrobond.
Euro Area Inflation Data
| 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|
| Inflation (HICP, ann. var. %, aop) | 1.2 | 0.3 | 2.6 | 8.4 | 5.4 |
| Inflation (HICP, ann. var. %, eop) | 1.3 | -0.3 | 5.0 | 9.2 | 2.9 |
| Inflation (PPI, ann. var. %, aop) | 0.6 | -2.6 | 12.2 | 32.7 | -2.1 |
Harmonized inflation drops to lowest level since September 2024 in May
Latest reading: Harmonized inflation fell to 1.9% in May, slightly below April’s 2.2% and the ECB’s 2.0% target. May's result represented the lowest inflation rate since September 2024. Looking at the details of the release, prices for services rose at the slowest pace in three years. That said, prices for food, alcohol and tobacco rose at a sharper rate in May. In addition, the trend pointed down mildly, with annual average harmonized inflation coming in at 2.2% in May (April: 2.3%). Meanwhile, core inflation fell to 2.3% in May from the previous month's 2.7%. Finally, harmonized consumer prices dropped 0.03% in May over the previous month, contrasting the 0.57% increase recorded in April. May's result marked the sharpest fall in prices since January.
Outlook: Our Consensus is for inflation to remain around current levels, broadly matching the ECB’s 2.0% target amid downbeat oil prices and soft economic activity.
Panelist insight: ING’s Bert Colijn commented: “Recent trade war developments have so far had a downward impact on inflation in the eurozone. Global commodity prices have fallen, the euro has strengthened against the dollar, uncertainty has muted economic activity in the eurozone, and the European Commission has so far refrained from introducing retaliatory tariffs on the US, which would result in higher prices.”
Consensus Forecasts and Projections for the next ten years
How should you choose a forecaster if some are too optimistic while others are too pessimistic? FocusEconomics collects European inflation projections for the next ten years from a panel of 69 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts and averaged to provide one Consensus Forecast you can rely on for each indicator. By averaging all forecasts, upside and downside forecasting errors tend to cancel each other out, leading to the most reliable inflation forecast available for European inflation.
Download one of our sample reports to visualize what a Consensus Forecast is and see our European inflation projections.
Want to get access to the full dataset of European inflation forecasts? Send an email to info@focus-economics.com.
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