Annual inflation in the eurozone rose to 2.5%
Frank van Hulst, Unsplash
Annual inflation in the euro area continues to rise gradually, with 2.5 per cent in January 2025 compared to 2.4 per cent in December 2024. This data is provided by Eurostat in a preliminary estimate for January. Although growth is still moderate, it is important to consider what factors are influencing this figure and what changes are being observed in key sectors of the economy.
The services sector remains the leader of inflationary growth, with an annual growth rate of 3.9%. However, this is still a slight slowdown compared to December's 4.0%. Prices for food, alcohol and tobacco rose by 2.3%, while in December the growth rate was 2.6%. The jump in energy prices is interesting: 1.8% versus 0.1% a month earlier. This may indicate changes in the dynamics of global oil and gas prices or domestic regulatory factors.
The highest price increases were recorded in Croatia (5.0%), Slovakia (4.1%) and Austria (3.5%). At the same time, the Baltic States show a decline in inflation: in Estonia it dropped to 2.8%, and in Latvia and Lithuania - to 3.0% and 3.4%, respectively. The lowest rate was recorded in Italy (1.7%) and Finland (1.6%).
The current inflation rate remains above the European Central Bank's target (2.0%), but its dynamics does not yet indicate a sharp rise. However, accelerating inflation in the energy sector may become a factor that will require a revision of monetary policy. Full statistics for January are expected in February 2025, which will provide a more detailed picture.
Price growth in the eurozone remains under control, but risks remain related to possible changes in global commodity markets and domestic economic factors. The main question is how sustainable the current upward trend will be and whether it will require tough measures from regulators.
