In the Eurozone: Annual Inflation Slips to 2.6%

In February 2024, the euro area witnessed a decline in its annual inflation rate, dropping to 2.6% from January's 2.8%. This shift marks a substantial decrease compared to the previous year's rate, which stood at a notable 8.5%. Similarly, the European Union's annual inflation rate for February 2024 was reported at 2.8%, down from January's 3.1% and significantly lower than the 9.9% recorded a year earlier. These statistics were recently published by Eurostat.

According to the latest data, the countries with the lowest annual inflation rates included Latvia and Denmark, both at a mere 0.6%, alongside Italy, which reported 0.8%. Conversely, Romania, Croatia, and Estonia topped the list with the highest annual inflation rates, registering 7.1%, 4.8%, and 4.4%, respectively. A comparative analysis with January reveals that annual inflation rates decreased in twenty Member States, remained stable in five, and increased in two.

Breaking down the contributing factors to the annual inflation rate within the euro area for February, services emerged as the primary driver, contributing +1.73 percentage points (pp). Following closely were food, alcohol, and tobacco, adding +0.79 pp to the inflation rate, while non-energy industrial goods contributed +0.42 pp. Interestingly, the energy sector exhibited a negative impact, deducting -0.36 pp from the overall inflation rate.

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