The lowest inflation occurred in France, Spain and Malta. The Baltic countries remain champions
By Chrysostomos Tsoufis
Inflation seems to be hitting the brakes in the Eurozone, according to the data of the first estimate published by Eurostat. From an all-time high of 10.6% in October, inflation fell to 10%, well below Bloomberg analysts who expected 10.4%.
Third consecutive month of de-escalation for Greece, for which the first estimate is of 9% inflation, the 6th lowest rate among the 19 countries for which data is available. From the high of the year in September when inflation was at 12.1%, a decrease of more than 3 points is observed.
Lower inflation occurred in France, Spain and Malta. The Baltic countries, Latvia, Lithuania and Estonia remain champions. Despite the general drop in inflation in the Eurozone, the countries with a single-digit rate, among themselves and Greece, 8 remained and remained a minority.
Falling inflation is naturally related to falling energy inflation. After 2 months (September and October) when it was above 40%, in November it fell below 35% as the price of natural gas remained around €120/Mwh most days of the month. At the same time, the international price of oil also fell from $98.5 at the beginning of the month to $84 at the end.
But things are particularly worrying in the food sector, where inflation is rising month by month having already reached 13.6% from 12.4% the previous month while structural inflation – which excludes food and energy – increased further to 6.6% from 6.4% in October. A slight increase in services to 4.3% from 4.2%.
The brake on inflation creates expectations that the ECB will limit the pace of interest rate increases. Estimates say that on December 15 Frankfurt will raise interest rates by 50 points instead of 75 in the previous 2 hikes.
In Frankfurt, however, they are very cautious. Not even 48 hours have passed since Christine Lagarde stated – in response to related questions – in the European Parliament that she would be surprised if the level of inflation in October was also the zenith. November’s early figures certainly surprised her and everyone hopes it continues…
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