Inflation in the euro area

Data from December 2020. Extracted on 7 January 2021.

Next planned article update: 20 January 2021.

Highlights

Euro area annual inflation is expected to be -0.3 % in December 2020, stable compared to November 2020.

Euro area annual inflation and its main components (%), December 2010 - December 2020 (estimated)
Source: Eurostat (prc_hicp_manr)

The ﬁgures presented in this article are early estimates of the Harmonised Index of Consumer Prices (HICP).

Data collection for HICP has been affected by the COVID-19 crisis in all euro area countries. Eurostat and the Member States’ national statistical institutes have agreed a set of procedures to estimate prices that could not be collected due to mobility restrictions or closures of outlets. All information on the compilation of the HICP during the COVID-19 crisis can be found in the HICP Methodology page of Eurostat’s website.

Full article

Euro area annual inflation rate and its main components

Euro area annual inflation is expected to be -0.3 % in December 2020, stable compared to November 2020.

Looking at the main components of euro area inflation, food, alcohol & tobacco is expected to have the highest annual rate in December (1.4 %, compared with 1.9 % in November), followed by services (0.7 %, compared with 0.6 % in November), non-energy industrial goods (-0.5 %, compared with -0.3 % in November) and energy (-6.9 %, compared with -8.3 % in November).

Table 1: Euro area annual inflation and its main components (%), 2020, December 2019 and July - December 2020 (estimated)
Source: Eurostat (prc_hicp_manr)

Figure 1: Euro area annual inflation and its main components (%), December 2010 - December 2020 (estimated)
Source: Eurostat (prc_hicp_manr)

Figure 2: Euro area annual inflation and its main components (%), December 2018 - December 2020 (estimated)
Source: Eurostat (prc_hicp_manr)

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 2020, 100 % for the headline HICP, services is the largest component, accounting for around 44.9 % of household final monetary consumption expenditure in the euro area. It is followed by non-energy industrial goods with around 26.2 %.

Food, alcohol & tobacco and energy account for 19.1 % and 9.8 %, respectively. Together, they comprise less than one third of euro area expenditure, but they can have significant impacts on the headline inflation as their prices tend to fluctuate significantly more than the other components.

The weights of the main components of the euro area for 2020 are presented in Figure 3. Table 2 shows their relative weights for 2020.

Figure 3: Weights of the main components of the euro area HICP - 2020
Source: Eurostat (prc_hicp_inw)

Table 2: Relative weights of HICP components - 2020 (out of 1 000)
Source: Eurostat (prc_hicp_inw)

HICP methodology (updated February 2018)
HICP at constant tax rates

HICP News Releases

News Release 113/2001 – First release of the Flash estimates
News release 137/2012 – First release of the Flash estimate main components

Harmonised indices of consumer prices (HICP), see a predefined selection under these links:

HICP (2015 = 100) - monthly data (index) (prc_hicp_midx)

HICP (2015 = 100) - monthly data (annual rate of change) (prc_hicp_manr)

HICP (2015 = 100) - monthly data (monthly rate of change) (prc_hicp_mmor)

HICP - Item weights (prc_hicp_inw)

Contributions to euro area annual inflation (in percentage points) (prc_hicp_ctrb)

Harmonised indices of consumer prices (ESMS metadata file - prc_hicp_esms)
ECOICOP-HICP classification

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