Euro Area Inflation Drops to 2.5%

Annual inflation in the euro area fell to 2.5% in June 2024, down from 2.6% in May, according to Eurostat, the statistical office of the European Union. This is a significant decrease from the 5.5% inflation rate recorded in June 2023. In the broader European Union, the annual inflation rate dropped to 2.6% in June 2024 from 2.7% in May, compared to 6.4% a year earlier.

Finland, Italy, and Lithuania registered the lowest annual inflation rates at 0.5%, 0.9%, and 1.0%, respectively. On the other hand, Belgium (5.4%), Romania (5.3%), Spain, and Hungary (both 3.6%) experienced the highest rates. Compared to May 2024, inflation fell in seventeen member states, remained stable in one, and rose in nine.

In June 2024, the primary contributors to the euro area’s annual inflation were services (+1.84 percentage points), followed by food, alcohol, and tobacco (+0.48 pp), non-energy industrial goods (+0.17 pp), and energy (+0.02 pp).