Eurozone inflation has fallen to a three-year low, reaching 2.2% in August 2024, according to Eurostat data. That's down from 2.6% in July and continues a downward trend as the European Central Bank (ECB) seeks to rein in inflation.
Despite this progress, inflation remains above the ECB's 2% target after several interest rate cuts to curb price increases.
Inflation across the European Union fell to 2.4% from 2.8% in July, highlighting a trend of slowing price growth regionally – a significant improvement in the fight against rising prices, compared with a staggering 5.9% just a year ago, according to reports.
In terms of sectoral contributions to inflation, services prices increased the most in August, rising 1.8%. Food, alcohol and tobacco prices increased more slowly, by 0.46%. Energy prices fell 0.29%, helping to ease overall inflationary pressures, Euronews reported.
Core inflation, which excludes volatile items such as food and energy, was reported at 2.8%. This is still above the ECB's 2% target but down significantly from the 5.3% recorded in the same period last year, suggesting that ECB policy may be having the desired effect of easing inflationary pressures.
Inflation rates varied widely across euro area countries.
Germany's annual inflation rate for August 2024 was confirmed at 1.9%, down from 2.3% the previous month and in line with expectations, and the lowest inflation rate since March 2021.
Lithuania recorded the lowest inflation rate with just 0.8%, followed by Latvia at 0.9%. Other countries with low inflation rates included Ireland, Slovenia and Finland, all at 1.1%. In contrast, Romania and Belgium recorded the highest inflation rates at 5.3% and 4.3% respectively.
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(Editor: Shoma Bhattacharjee)
First Edition: September 18, 2024 7:46 PM IST
