Eurozone Inflation Accelerates As Expected
May 17 2023 - 04:35AM
RTTF2
Eurozone inflation rose as estimated in April on higher food and
energy prices, while core inflation slowed slightly, final data
from Eurostat showed Wednesday.
The harmonized index of consumer prices posted an annual growth
of 7.0 percent in April, following a 6.9 percent rise in March. The
rate was in line with the preliminary estimate released on May
2.
By contrast, excluding energy, food, alcohol and tobacco prices,
core inflation slowed slightly to 5.6 percent from 5.7 percent a
month ago. The core rate was also confirmed.
On a monthly basis, the HICP rose 0.6 percent, slightly weaker
than the flash estimate of 0.7 percent.
The European Central Bank had raised its benchmark rates by a
quarter-point early this month after the release of flash inflation
data. Policymakers were of the view that the inflation outlook in
the currency bloc remained "too high for too long."
ECB Chief Christine Lagarde also signaled more rate hikes ahead.
Nonetheless, the bank slowed the pace of policy tightening from a
half-a-point hike in March.
In the EU Spring economic forecast, the European Commission
lifted its inflation forecast and cautioned that the slowdown in
core inflation will be more gradual than previously estimated.
Eurozone inflation was projected at 5.8 percent this year, up from
5.6 percent estimated previously. The forecast for 2024 was raised
to 2.8 percent from 2.5 percent.
April inflation was mainly driven higher by food, alcohol and
tobacco prices, which climbed 13.5 percent after a 15.5 percent
gain in March, data showed today.
Energy prices, the major force behind high inflation over the
last year, advanced only 2.4 percent. But this was in contrast to
the 0.9 percent drop in March.
The increase in non-energy industrial goods prices slowed to 6.2
percent from 6.6 percent. Meanwhile, reflecting rising wages,
services inflation advanced to 5.2 percent 5.1 percent.
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