| 28 May 2024, Tuesday |

Euro zone inflation easing confirmed, trade surplus dips

Official figures released on Friday indicated that euro zone inflation slowed in June following a steady rise in the opening months of 2021, while the bloc’s trade surplus decreased in May due to a drop in exports.

Consumer prices in the 19-country single-currency bloc grew 1.9 percent year over year in June, slightly less than the 2.0 percent growth in May, according to Eurostat, the first decrease since September.

Eurostat issued an initial estimate on June 30 that was corroborated by the final data.

One measure of core inflation, which excludes volatile unprocessed food and energy, was confirmed as stable at 0.9% in June. A narrower measure, also stripping off alcohol and tobacco prices, was also confirmed at 0.9%, slightly lower than 1.0% in May.

The European Central Bank expects inflation to rise later in the year, but it has made it clear that the acceleration is mainly due to one-off factors as the global economy recovers from the worst phase of the coronavirus pandemic. Therefore, no tightening is on the cards and borrowing costs are set to stay ultra-low for years to come.

Energy costs added 1.16 percentage points to the overall inflation rate of 1.9 percent.

Eurostat stated in a separate statement that the euro zone’s goods trade surplus with the rest of the world was narrower in May than it was in April.

In May, the EU exported 188.2 billion euros ($222 billion) and imported 180.7 billion euros, resulting in a 7.5 billion euro surplus.

The surplus was 10.9 billion euros in April, owing to a larger volume of exports.

  • Reuters