Inflation in the Eurozone accelerated to 2.9% y/y in December

Inflation in the euro area rose by 2.9% y/y in December 2023, accelerating from 2.4% in November. Thus, inflation in Europe increased for the first time since April 2023. This is evidenced by preliminary data from Eurostat.

Analysts polled by Trading Economics expected inflation in the euro area to rise by 3% in December.

At the same time, annual core inflation, which excludes energy and food costs, slowed to 3.4% in December. Energy prices decreased by 6.7% compared to 11.5% in November 2023.

The lowest inflation rates were recorded in Belgium (0.5%) and Italy (0.5%), while the highest were in Slovakia (6.6%) and Austria (5.7%). In Germany, it amounted to 3.8%, and in France – 4.1%.

According to the latest Eurostat data, inflation in the euro area slowed to 2.4% y/y in November. Thus, inflation in Europe has reached its lowest level since July 2021.

As GMK Center reported earlier, the GDP of the Eurozone in July-September 2023 decreased by 0.1% compared to April-June 2023. Compared to the third quarter of 2022, the economy of the Eurozone grew by 0.1%.

The economy of the European Union in the III quarter of 2023 grew by 0.1% compared to the previous quarter. In annual terms, EU GDP grew by 0.1% in the third quarter.

The European Commission has downgraded its growth forecast for the eurozone economy in 2023 and 2024 as inflation is still too high, consumer spending is declining, and Germany, the region’s largest economy, is slipping into recession. Eurozone GDP is expected to grow by 0.8% in 2023 and by 1.3% in 2024. These figures are lower than the May forecasts of 1.1% and 1.6%, respectively.