Inflation in the euro area

Data from May 2019. extracted on 4 June 2019.

Next planned article update: 18 June 2019.

Highlights

Euro area annual inflation is expected to be 1.2 % in May 2019, down from 1.7 % in April 2019.

Euro area annual inflation and its main components (%), January 2010-May 2019 (estimated)
Source: Eurostat (prc_hicp_manr)

The figures presented are early estimates of euro area inflation.

Full article

Euro area annual inflation rate and its main components

Euro area annual inflation is expected to be 1.2 % in May 2019, down from 1.7 % in April 2019.

Looking at the main components of euro area inflation, energy is expected to have the highest annual rate in May (3.8 %, compared with 5.3 % in April), followed by food, alcohol & tobacco (1.6 %, compared with 1.5 % in April), services (1.1 %, compared with 1.9 % in April), and non-energy industrial goods (0.3 %, compared with 0.2 % in April).

Table 1: Euro area annual inflation and its main components (%), 2019, May 2018 and December 2018-May 2019 (estimated)
Source: Eurostat (prc_hicp_manr)

Figure 1: Euro area annual inflation and its main components (%), January 2010-May 2019 (estimated)
Source: Eurostat (prc_hicp_manr)

Figure 2: Euro area annual inflation and its main components (%), May 2017-May 2019 (estimated)
Source: Eurostat (prc_hicp_manr)

Flash estimate and full HICP data

The euro area inflation flash estimate is issued on the last day of each reference month or shortly after. It is computed from preliminary data provided to Eurostat by all euro area Member States. When the full set of harmonised indices of consumer prices (HICP) is released around the middle of each month following the reference month, preliminary data are replaced by the final Member States figures. Table 2 compares the flash estimate and the final HICP annual rates for the same reference month. The table represents data at the time of the first publication, without any consequent reviews. This table is updated once a month, with the release of the full data.

Table 2: Flash estimates and HICP annual rates for the all-items and main components – April 2018-April 2019 (unrevised)
Source: Eurostat (prc_hicp_fp)

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 2019, 100 % for the headline HICP, services is the largest component, accounting for around 44.5 % of household monetary consumption expenditure in the euro area. It is followed by non-energy industrial goods with around 26.4 %.

Food, alcohol & tobacco and energy account for 19 % and 10.1 %, 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 for of the euro area for 2019 are presented in Figure 3. Table 3 shows their relative weights for 2019.

Figure 3: Weights of the main components of the euro area HICP (2019)
Source: Eurostat (prc_hicp_inw)

Table 3: Relative weights of the HICP main components (%) (2019)
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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Data visualisation

Inflation dashboard

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