Inflation rises in December

Latest reading: Harmonized consumer prices increased 1.7% in annual terms in December, following a 1.5% rise in the prior month. Relative to the prior month's data, there were higher price pressures for food and non-alcoholic beverages (+2.0% in annual terms vs +1.7% in November), recreation (+2.1% vs +1.3% in November) and restaurants and hotels (+2.3% vs +2.0% in November). In contrast, price pressures reduced for transportation in December (-0.1% vs +0.1% in November). Finally, the change in housing and utilities prices was the same as in the prior month (+1.4% in December and November). Meanwhile, consumer prices were up 0.2% on a year-on-year basis in December, following a 0.1% fall in the prior month. December’s result was the lowest December reading in ten years. The key difference between the harmonized and national consumer price indices is that the national index accounts for both owner occupied and rented housing, while the harmonized index includes only rented housing. Lastly, harmonized consumer prices were up 0.24% in December in month-on-month terms, following a 0.14% decline in the prior month.

Outlook: Our panelists expect harmonized inflation to remain largely stable at current levels through Q3 2026, before edging up at the close of the year.

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