Table of Contents:
The inflation environment in the Eurozone
Inflation in the Eurozone increased significantly in December 2023, confirming preliminary estimates released by Eurostat. Official data show a 2.4% year-on-year increase in consumer prices, compared to 2.2% in November. This increase represents a concern for consumers and economic authorities, as inflation continues to exceed expectations.
Analysis of monthly data
On a monthly basis, inflation showed a change of 0.4%, in stark contrast to the 0.3% decline recorded in the previous month.
This change suggests a recovery in consumption and greater price pressure, which could influence the monetary policy decisions of the European Central Bank (ECB). In addition, core inflation, which excludes volatile components such as fresh food, energy, alcohol and tobacco, maintained an annual growth rate of 2.7%, in line with previous estimates and compared
to the month of November.
Implications for the European economy
The monthly change in core inflation stood at 0.5%, confirming the initial estimate after a decrease of 0.6% in the previous month. Harmonized inflation in the Eurozone reached an annual rate of 2.7%, slightly lower than the preliminary estimate of 2.8%, but consistent with the previous quarter. These data raise questions about future economic and monetary policies, as persistent inflation could push the ECB to consider raising interest rates to contain price growth
.
Market reactions
In a global context, inflation in the Eurozone is part of a complex economic framework, influenced by various factors, including international market trends and central bank policies. Recent news from the Tokyo Stock Exchange, where the Nikkei index closed down 0.31%, highlights how the expectations of a rate hike by the Bank of Japan (BoJ) and the strengthening of the yen are negatively affecting the market. The actions of exporting companies have been particularly affected, suggesting that the trend in inflation and monetary policies will have repercussions even
beyond European borders.
