June lifts Eurozone out of deflation

Euro area annual inflation gradually increased throughout June, moving from -0.1% to +0.1% compared to the previous month, according to the latest Eurostat data.

Nevertheless, inflation levels are still below those of the previous year, in June 2015, inflation was at 0.2%. The slight increase of prices was largely driven by the services sector, where prices increased to +1.1% month on month, whilst prices for food, alcohol and tobacco remained stable. The fall of energy prices slowed down somewhat, from -8.1% in May to -6.4% in June.

Countries in Southern and Eastern Europe continued to show persistent levels of deflations, with prices in Cyprus falling by -2%, followed by Bulgaria, Croatia and Spain. Inflation was the highest in Belgium, where prices increased by 1.8%, followed by Sweden. However, Portugal and Malta also saw price increases of 0.7% and 1% respectively.

Mona Dohle
Mona Dohle speaks German and Dutch and is DACH & Benelux Correspondent for InvestmentEurope.

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