Statistics Explained

Inflation in the euro area


Data from January 2023. Extracted on 1 February 2023.

Next planned article update: 23 February 2023.

Highlights

Euro area annual inflation is expected to be 8.5% in January 2023, down from 9.2% in December 2022.

Line chart with five lines showing the development of euro area annual inflation and its four main components monthly during the last two years until January 2023. The four components are: 1) food, alcohol and tobacco, 2) energy, 3) non-energy industrial goods, and 4) services.
Euro area annual inflation and its main components, January 2013 - January 2023 (estimated)
(%)
Source: Eurostat (prc_hicp_manr)

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

Full article

Euro area annual inflation rate and its main components

Euro area annual inflation is expected to be 8.5 % in January 2023, down from 9.2 % in December 2022.

Looking at the main components of euro area inflation, energy is expected to have the highest annual rate in January (17.2 %, compared with 25.5 % in December), followed by food, alcohol & tobacco (14.1 %, compared with 13.8 % in December), non-energy industrial goods (6.9 %, compared with 6.4 % in December) and services (4.2 %, compared with 4.4 % in December).

Table on the euro area annual inflation and its main components. The ten rows show the following items: 1) all-items, 2) all-items excluding energy, 3) all-items excluding energy and unprocessed food, 4) all-items excluding energy, food, alcohol and tobacco, 5) food, alcohol and tobacco, 6) processed food, alcohol and tobacco, 7) unprocessed food, 8) energy, 9) non-energy industrial goods, and 10) services. Data is shown in eight columns, which are: the item group's weight in 2022 in per mil, as well as the euro area annual inflation in the month January 2022 and the six months from August 2022 to January 2023.
Table 1: Euro area annual inflation and its main components, 2023, January 2022 and August 2022-January 2023 (estimated)
(%)
Source: Eurostat (prc_hicp_inw) and (prc_hicp_manr)


Line chart with five lines showing the development of euro area annual inflation and its four main components monthly during the last ten years until January2023. The four components are: 1) food, alcohol and tobacco, 2) energy, 3) non-energy industrial goods, and 4) services.
Figure 1: Euro area annual inflation and its main components, January 2013 - January 2023 (estimated)
(%)
Source: Eurostat (prc_hicp_manr)


Line chart with five lines showing the development of euro area annual inflation and its four main components monthly during the last two years until January 2023. The four components are: 1) food, alcohol and tobacco, 2) energy, 3) non-energy industrial goods, and 4) services.
Figure 2: Euro area annual inflation and its main components, January 2021 - January 2023 (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 expected weights for 2023, with 100 % for the headline HICP, services is the largest component, accounting for around 43.5 % 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 are expected to account for 19.9 % and 10.3 %, 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 estimated provisional weights of the main components of the euro area for 2023 are presented in Figure 3. Table 2 shows their estimated provisional relative weights for 2023.

Doughnut chart showing the estimated weights of the four main components of the euro area HICP in 2023.
Figure 3: Weights of the main components of the euro area HICP - 2023 (estimated)
Source: Eurostat (prc_hicp_inw)


Table on the weights of all-items, of the four main components and of 15 of their subcomponents of the euro area HICP in 2023.
Table 2: Weights of the components of the euro area HICP - 2023 (estimated)
Source: Eurostat (prc_hicp_inw)

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