Inflation in the euro area


Data from April 2018 – extracted on 16 May 2018.

Next planned article update: 31st May 2018.

Highlights

Euro area annual inflation was 1.2 % in April 2018, down from 1.3 % in March 2018.

Figure 1: Euro area annual inflation and its main components (%), January 2008 - April 2018
Source: Eurostat (prc_hicp_manr)

The data in this article show the most recent annual rates of change for the euro area headline inflation and its main components issued by Eurostat. The figures presented are actual HICP figures.


Full article

Euro area annual inflation rate and its main components

Euro area annual inflation was 1.2 % in April 2018, down from 1.3 % in March 2018.

Looking at the main components of euro area inflation, energy had the highest annual rate in April (2.6 %, compared with 2.0 % in March), followed by food, alcohol & tobacco (2.4 %, compared with 2.1 % in March), services (1.0 %, compared with 1.5 % in March), and non-energy industrial goods (0.3 %, compared with 0.2 % in March).

Table 1: Euro area annual inflation and its main components (%), 2018, April 2017 and November 2017-April 2018
Source: Eurostat (prc_hicp_manr)


Figure 1: Euro area annual inflation and its main components (%), January 2008 - April 2018
Source: Eurostat (prc_hicp_manr)


Figure 2: Euro area annual inflation and its main components (%), May 2016 - April 2018
Source: Eurostat (prc_hicp_manr)

Flash estimate and full HICP data

The euro area inflation flash estimate is issued at the end of each reference month or shortly after. When the complete set of harmonised indices of consumer prices (HICP) is released around the middle of each month following the reference month, estimated data are replaced by actual data derived from the Member States figures. Further information on the accuracy of the flash estimates can be found in the article 'Inflation – methodology of the euro area flash estimate'.

Main components of inflation

Each of the main components contributes in varying degree to the headline inflation in the euro area. In terms of weights for 2018, set at 1000 for the all-items HICP, services the largest component, accounting for around 44.4 % of individual consumption expenditure in the euro area. It is followed by non-energy industrial goods with around 26.3 %.

Food, alcohol & tobacco and energy account for 19.6 % and 9.7 %, respectively. Together, they comprise less than one third of euro area expenditure, but they can have significant impacts on the headline inflation as their levels tend to fluctuate significantly more than the other components.

The weights of the main components for of the euro area for 2018 are presented in Figure 3. Table 2 shows their relative weights for 2018.

Figure 3: Weights of the main components of the euro area HICP (2018)
Source: Eurostat (prc_hicp_inw)


Table 2: Relative weights of the HICP main components (%) (2018)
Source: Eurostat (prc_hicp_inw)

The breakdown of the HICP into four main components does not follow the standard COICOP classification, but groups items from different expenditure classes into four broad product categories. For further details on the composition/sub-indices, please see Eurostat's COICOP/HICP classification.

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