OPINION
Market Rating Before FOMC MeetingJan 31
Price Pressures in Eurozone
According to EuroStat data released today, consumer price index in Eurozone increased by 0.3 percent (MoM) and registered as 5.1, above forecast of 4.7 percent on annual basis.
Services prices didn’t change on monthly basis, food, alcohol & tobacco increased by 1.1 and energy prices grew by 6.0. On the other hand, non-energy industrial goods declined by 2.0 percent (MoM).
Energy had the highest annual rate in January with 28.6 percent, followed by food, alcohol & tobacco (3.6 percent), services (2.4 percent) and non-energy industrial goods (2.3 percent).
Inflation ranking is as follows in Eurozone: Lithuania (12.2 percent), Estonia (11.7 percent) and Belgium and Slovakia (8.5 percent). Three countries with the lowest inflation rate were Malta (3.8 percent) and Finland and Portugal (3.4 percent).
High levels in energy commodities, especially crude oil, continue to be the main determinant of inflation. However, since the limited measures taken by the EU countries against the Omicron variant weakened domestic demand, price pressures seem to have eased. Thus, the moderate decline in core inflation indicators in January also supports this situation.
In addition, the strong base effect, which will come into play as of the Q2 2022, is likely to ease the pressure and pave the way for a downward path in the annual inflation Outlook.
Services prices didn’t change on monthly basis, food, alcohol & tobacco increased by 1.1 and energy prices grew by 6.0. On the other hand, non-energy industrial goods declined by 2.0 percent (MoM).
Energy had the highest annual rate in January with 28.6 percent, followed by food, alcohol & tobacco (3.6 percent), services (2.4 percent) and non-energy industrial goods (2.3 percent).
Inflation ranking is as follows in Eurozone: Lithuania (12.2 percent), Estonia (11.7 percent) and Belgium and Slovakia (8.5 percent). Three countries with the lowest inflation rate were Malta (3.8 percent) and Finland and Portugal (3.4 percent).
High levels in energy commodities, especially crude oil, continue to be the main determinant of inflation. However, since the limited measures taken by the EU countries against the Omicron variant weakened domestic demand, price pressures seem to have eased. Thus, the moderate decline in core inflation indicators in January also supports this situation.
In addition, the strong base effect, which will come into play as of the Q2 2022, is likely to ease the pressure and pave the way for a downward path in the annual inflation Outlook.
