The Eurozone yearly inflation rate continued to drop in March, reaching 6.9 percent compared to 8.5 percent in February, according to a flash estimate published Friday by Eurostat, the European statistical service.
Food, alcohol and tobacco are now the main drivers of inflation in the Eurozone, with yearly inflation reaching 15.4 percent in March compared to 15 percent the previous month, it said.
“This indicates that price pressures remain high for the moment, although this should improve in the coming months,” said Bert Colijn, Senior Economist for the Eurozone at ING bank. “Producer prices for food have also come off peaks,” he added.
Meanwhile, the price of non-energy goods decreased, with a year-on-year price increase of 6.6 percent compared to February’s 6.8 percent.
“Transport costs and supply chain problems have eased substantially, which has led to manufacturers seeing a drop in selling price expectations,” said Colijn.
Yearly inflation for services in March reached 5 percent, compared to 4.8 percent in February. The price of services could be affected by wage growth and low unemployment, warned Colijn.
However, the year-on-year inflation rate for energy “dropped like a stone”, going from 13.7 percent in February to an expected -0.9 percent in March.
This “is the first decline in energy inflation since February 2021,” said Colijn, adding that future energy prices look manageable.
The Baltic countries recorded the highest year-on-year inflation rates, with 15.2 percent for Lithuania, 15.6 percent for Estonia, and 17.3 for Latvia.
Countries that recorded the lowest yearly inflation rates in March included Luxembourg with 3 percent, Spain with 3.1 percent, and the Netherlands with 4.5 percent.
