BRUSSELS, May 3 — Inflation in the eurozone jumped to 1.7 per cent in April, the Eurostat data agency showed today, fuelled by a surprise surge in prices in Germany.
Analysts surveyed by data company Factset had predicted a more modest rebound to 1.6 per cent, up from the 1.4 per cent logged in March.
A rise in prices was expected due to the late timing of the Easter holiday, but the final number exceeded expectations, though a drop is expected later in the year as energy prices fall.
The price spike will be welcome news for the European Central Bank, which has delivered years of ultra-low interest rates and pushed trillions of euros in stimulus towards stoking inflation across the 19-nation eurozone to its target of just below 2.0 per cent.
Central bankers will also closely evaluate the rise in core inflation, which strips out volatile prices such as energy, that reached 1.2 per cent in April, up from 0.8 per cent in March.
The rise in inflation comes as worries grow about the European economy, though growth data on Tuesday showed the eurozone was not in immediate risk of falling into a recession.
Germany and Italy account for much of a feared slowdown, with export-oriented Germany suffering the effects of the US-China trade war and Italy expected to stagnate owing to high debt levels and muted domestic demand.
Before today’s data, Eurozone central bankers last month slashed their price growth predictions, seeing inflation rising from just 1.2 per cent this year to 1.6 per cent in 2021 — consistently off the 2.0 per cent target.
Economists blame the persistently low inflation on the failure of wages to rise along with the expanding economy, which has dampened consumer demand.
On Tuesday, data showed that inflation in Europe’s largest economy Germany surged in April to 2.0 per cent year-on-year. — AFP
