Inflation in the euro area

Data from April 2021. Extracted on 30 April 2021.

Next planned article update: 19 May 2021.

Highlights

Euro area annual inflation is expected to be 1.6 % in April 2021, up from 1.3 % in March 2021.

Euro area annual inflation and its main components (%), April 2011 - April 2021 (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 1.6 % in April 2021, up from 1.3 % in March 2021.

Looking at the main components of euro area inflation, energy is expected to have the highest annual rate in April (10.3 %, compared with 4.3 % in March), followed by services (0.9 %, compared with 1.3 % in March), food, alcohol & tobacco (0.7 %, compared with 1.1 % in March) and non-energy industrial goods (0.5 %, compared with 0.3 % in March).

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

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

Figure 2: Euro area annual inflation and its main components (%), April 2019 - April 2021 (estimated)
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.