Eurozone, March inflation drops to 2.2 percent

Brussels –In the eurozone, inflation is expected to be 2.2 percent in March, down compared with February (2.3 percent) and close to the European Central Bank’s target of 2 percent. Eurostat’s preliminary data is good news for the 20 EU member states with the single currency, as it appears to confirm the ECB’s own estimates for a return to preferred levels by mid-year, despite international and trade turbulence.

The slowdown was driven by energy (-0.7 percent in March, down from 0.2 percent in February) and services (3.4 percent, down from 3.7 percent in the previous month). In contrast, the non-energy industrial goods component was stable (0.6 percent, unchanged). Bucking the trend was food, alcohol, and tobacco, which increased (2.9 percent, up from 2.7 percent in February).

 Between February and March, inflation decreased in Germany and Spain, remained unchanged in France, and increased in Italy. However, despite the different dynamics, except for France, the values of the biggest economies show a cost-of-living rate in line with the ECB’s benchmark targets.

The Governing Council of the European Central Bank will meet to decide on monetary policy on April 17, in time for the final data that the European Statistical Office will provide on April 16. There seems to be an intention to pause in the cutting of interest rates due to rising downside risks to the economy and inflation. Meanwhile, inflation is falling, and this is certainly welcomed data.