Inflation in the eurozone slowed to 1.7% y/y in January

Energy prices fell by 4.1% y/y

Annual inflation in the eurozone fell to 1.7% in January 2026, compared to 2% in December last year. This is according to preliminary estimates by Eurostat.

Consumer price growth last month was held back by lower energy costs and the strengthening of the euro. Core inflation (excluding food and energy prices) slowed to 2.2% in January, reaching its lowest level since October 2021.

The highest annual inflation rate for the period will be in the services sector (3.2% y/y), followed by food, alcohol, and tobacco (2.7% y/y), and non-energy industrial goods (0.4% y/y).

Energy prices in the eurozone fell by 4.1% year-on-year in January, significantly more than in December (-1.9%).

In January, the highest annual inflation rates were recorded in Slovakia (+4.2%), Croatia (+3.6%), and Greece (+2.9%). In France, inflation was 0.4%, and in Italy, it was +1%. In Germany, consumer prices rose by 2.1% over the period.

Recall that according to December forecasts by ECB experts, the eurozone economy will grow by 1.2% in 2026 and by 1.4% in 2027. The forecast for overall inflation for the current year has been revised to 1.9% from 1.7%. In 2027, the regulator forecasts inflation at 1.8%. Consumer prices excluding energy and food (core inflation) will rise by 2.2% this year.

The regulator’s assessment confirms that inflation should stabilize at the target level of 2% in the medium term.