Inflation in the euro area - Statistics Explained

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Inflation in the euro area


Data from March 2021. Extracted on 16 April 2021.

Next planned article update: 30 April 2021.

Highlights

Euro area annual inflation was 1.3 % in March 2021, up from 0.9 % in February 2021.

Euro area annual inflation and its main components (%), March 2011 - March 2021
Source: Eurostat (prc_hicp_manr)

The figures presented in this article are the actual 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 was 1.3 % in March 2021, up from 0.9 % in February 2021.

Looking at the main components of euro area inflation, energy had the highest annual rate in March (4.3 %, compared with -1.7 % in February), followed by services (1.3 %, compared with 1.2 % in February), food, alcohol & tobacco (1.1 %, compared with 1.3 % in February), and non-energy industrial goods (0.3 %, compared with 1.0 % in February).

Table 1: Euro area annual inflation and its main components (%), 2021, March 2020 and October 2020-March 2021
Source: Eurostat (prc_hicp_manr)


Figure 1: Euro area annual inflation and its main components (%), March 2011 - March 2021
Source: Eurostat (prc_hicp_manr)


Figure 2: Euro area annual inflation and its main components (%), March 2019 - March 2021
Source: Eurostat (prc_hicp_manr)



Main components of inflation

Each of the main components contributes in varying degrees to the headline inflation in the euro area. In terms of weights for 2021, 100 % for the headline HICP, services is the largest component, accounting for around 41.8 % of household final monetary consumption expenditure in the euro area. It is followed by non-energy industrial goods with around 26.9 %.

Food, alcohol & tobacco and energy account for 21.8 % and 9.5 %, 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 2021 are presented in Figure 3. Table 2 shows their relative weights for 2021.

Figure 3: Weights of the main components of the euro area HICP - 2021
Source: Eurostat (prc_hicp_inw)


Table 2: Relative weights of HICP components - 2021 (out of 1 000)
Source: Eurostat (prc_hicp_inw)



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