Inflation in the euro area


Data from July 2020. Extracted on 31 July 2020.

Next planned article update: 19 August 2020.

Highlights

Euro area annual inflation is expected to be 0.4 % in July 2020, up from 0.3 % in June 2020.

Euro area annual inflation and its main components (%), July 2010 - July 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 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 0.4 % in July 2020, up from 0.3 % in June 2020.

Looking at the main components of euro area inflation, food, alcohol & tobacco is expected to have the highest annual rate in July (2.0 %, compared with 3.2 % in June), followed by non-energy industrial goods (1.7 %, compared with 0.2 % in June), services (0.9 %, compared with 1.2 % in June) and energy (-8.3 %, compared with -9.3 % in June).

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


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


Figure 2: Euro area annual inflation and its main components (%), July 2018 - July 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)


Data visualisation


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