Euro area – “supply chain effect” on inflation diminishes
The core inflation rate in the euro area has stabilized at just under 3% in recent months.
Commerzbank Economic Research
July 29 2024
Will the inflation rate in the euro area fall back to 2% (or below) permanently by the end of next year or will it stabilize above the ECB's inflation target? For a long time, there were several arguments for the first scenario. This is because the inflation rate fell significantly throughout 2023. This was partly due to falling energy prices and much weaker increases in food prices. But even if these two often very volatile sub-components were factored out, the core inflation rate was clearly pointing downwards. Recently, however, both rates have stabilized.
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