Cyprus is the country in Europe that "killed" inflation and rightly so, it has the first in July as the economy with the smallest harmonized index, according to Eurostat estimates, i.e. 0.1%, lower than the 2% target set by the ECB.
In May and June, the rate was 0.4% and 0.5% respectively, while in July last year the index was 2.4%. It should be noted that in the two months (May and June) based on the methodology applied by the Statistical Service – the July data will be announced on August 7 – Cyprus according to the Consumer Price Index had deflation, i.e. a negative sign, something that is not excluded to happen with the announcement of the latest data.
Which other countries are doing well according to Eurostat in the Harmonized Price Index. After Cyprus, France follows with an estimate that the index in July is 0.9% and from then on most countries at best have more than 1.5% and at worst 2.5% to 3% or more. The data show that Ireland in July has inflation of 1.6%, Italy 1.7%, Germany 1.8% and countries with inflation below 2% finish. It is followed by Finland with 2%, Portugal, the Netherlands, Malta with 2.5%, Belgium with 2.6%, Spain with 2.7% and Slovenia with 2.9%. They have more than 3%, Lithuania 3.5%, Austria 3.6%, Greece 3.7%, Latvia 3.9%, Croatia and Slovakia 4.5%, Estonia 5.6%, which is the highest in the Eurozone.
Across the eurozone, the harmonized index at its general level remained at 2% year-on-year as in June, while analysts' average estimate predicted a marginal slowdown to 1.9%. The 2% for the eurozone confirms the ECB's optimistic view on prices and reinforces policymakers' arguments to keep interest rates unchanged for some time after the sharp decline in borrowing costs.
In the monthly comparison, prices in the euro area remained unchanged (0%) after the previous monthly increase of 0.3%. The trend was similar in the narrower measure of so-called core inflation, which does not account for volatile energy and food prices and on which the ECB focuses as more informative of the path of inflationary pressures. The so-called structural index also remained unchanged at 2.3% year-on-year in July, while the average analyst estimate also predicted a marginal de-escalation to 2.2%.
In the individual data of Eurostat's preliminary measurement, inflationary pressures in the critical component of services declined at an annual rate of 3.1% from 3.3%, with food following the opposite path, to 3.3% from 3.1% in June. Non-energy goods ran at an annual rate of 0.8% from 0.5%, while energy prices continued to decline, with -2.5% after -2.6% in June.
