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Eurozone inflation fell to 2.8 percent in June

The eurozone's annual inflation rate fell to 2.8 percent in June from 3.2 percent in May. This is according to a flash estimate from the statistical office Eurostat, according to which price growth slowed mainly due to more moderate increases in energy prices. ekonomika.sme.sk ↗

The decline came after a period when energy prices rose sharply due to Iran's war with the US, pushing inflation indicators higher. The weaker June figure reduces the likelihood that the European Central Bank will need to raise interest rates again as early as July. The ECB raised rates in June for the first time in nearly three years, in response to persistently high inflation in the monetary union. SITA ↗

Developments across individual countries remain uneven. Slovak consumer prices rose 3.5 percent year-on-year in June, more markedly than the eurozone average, although the pace of growth slowed after reaching four percent in May. According to available data, Spain was the only major European Union economy where inflation did not fall in June, remaining at 3.6 percent. teraz.sk ↗

Bundesbank President Joachim Nagel warned that, despite the significant drop in oil prices, the ECB should not change its monetary policy stance. Further developments will depend on whether the slowdown in energy prices also translates into a more lasting decline in inflation in services, food, and broader consumption. ekonomika.sme.sk ↗

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