The euro area’s annual inflation rate remained at 2.4% in April 2024, the same as in March 2024, according to Eurostat. This marks a significant decrease from the 7.0% rate observed in April 2023. Similarly, the EU’s annual inflation rate was stable at 2.6% in April 2024, down from 8.1% a year earlier. Core inflation matched expectations, coming in at 2.7%.
The lowest inflation rates within the EU were observed in Lithuania (0.4%), Denmark (0.5%), and Finland (0.6%). Conversely, Romania (6.2%), Belgium (4.9%), and Croatia (4.7%) recorded the highest rates. Compared to March 2024, inflation fell in fifteen member states, remained stable in four, and increased in eight.
The primary driver of the annual inflation rate in the euro area was the services sector, contributing +1.64 percentage points (pp). Other significant contributors included food, alcohol & tobacco (+0.55 pp), non-energy industrial goods (+0.23 pp), while energy had a slight negative impact (-0.04 pp).
The Harmonized Index of Consumer Prices (HICP) data showed that the monthly inflation rate for April 2024 was 0.6% in both the euro area and the EU. Notably, Belgium experienced a slight deflation of -0.3% in April, while Croatia recorded a monthly rate of 1.0%.
The stability in inflation rates across the euro area and the EU suggests a period of relative price stability. However, varying inflation rates among member states indicate differing economic conditions and challenges. With the services sector being the main contributor to inflation, future rates will likely depend on developments in this sector.
Given the stable inflation rates, the outlook remains cautious but slightly bullish for the euro area. Continued monitoring of sectoral contributions, particularly in services and energy, will be crucial in forecasting future inflation trends.
James is a Florida-based technical analyst, market researcher, educator and trader with 35+ years of experience. He is an expert in the area of patterns, price and time analysis as it applies to futures, Forex, and stocks.