The eurozone annual inflation rate stood at 2.5 percent in January 2025, an increase from 2.4 percent in December 2024. In January 2024, the rate was 2.8 percent. For the European Union, the annual inflation rate was 2.8 percent in January 2025, rising from 2.7 percent in December 2024. The previous year, the rate was 3.1 percent. These statistics are provided by Eurostat, the statistical office of the European Union.
While an uptick in inflation is generally unwelcome, the recent figures align with the narrative articulated by ECB President Christine Lagarde. Last week, she indicated that price growth could fluctuate around these levels for the coming months before experiencing a slowdown toward the 2 percent target in the following period.
Read more: Eurozone composite PMI drops to 50.9 in June as business growth slows sharply
The discussion regarding a potential pause in policy easing may intensify starting in April, by which time the deposit rate could reach 2.5 percent, marking the upper end of the estimated range for the ‘neutral’ level—a rate that neither inhibits nor promotes growth.
Denmark recorded the lowest annual inflation rate at 1.4 percent, with Ireland, Italy, and Finland following closely at 1.7 percent each. In contrast, the highest annual rates were observed in Hungary (5.7 percent), Romania (5.3 percent), and Croatia (5.0 percent). When compared to December 2024, annual inflation decreased in eight Member States, remained unchanged in four, and increased in fifteen.
In January 2025, the largest contribution to the annual eurozone inflation rate was attributed to services (+1.77 percentage points), followed by food, alcohol, and tobacco (+0.45 percentage points), energy (+0.18 percentage points), and non-energy industrial goods (+0.12 percentage points).
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