Eurozone inflation falls sharply. Estonia stands out again

Annual inflation in the eurozone fell to 2.2% in August, the lowest in three years, according to Eurostat. Estonian dairy products. Photo illustrative. Photo: Tairo Lutter / Postimees Erkki Erilaid, journalist August 30, 2024, 1:24 PM

Annual inflation in the eurozone fell to 2.2% in August, the lowest in three years, according to Eurostat.

Eurozone inflation fell in August to its lowest level since mid-2021, strengthening arguments that the European Central Bank will cut interest rates again at its Governing Council meeting in less than two weeks. Eurozone inflation was 2.6% in July.

Looking at the main components of eurozone inflation, services rose 4.2 percent year-on-year in August (4.0 percent in July), followed by food, alcohol and tobacco at 2.4 percent (2.3 percent in July). Industrial goods rose 0.4 percent (0.7 percent in July) and energy fell 3 percent, compared with a 1.2 percent increase in July.

In August, prices grew the fastest in Belgium, by 4.5%. Prices rose by 3.4% in Estonia and by 3.3% in the Netherlands. In July, Estonia shared second and third place in the harmonized index of consumer prices (HICP) with the Netherlands. Prices rose by 3.5% in both countries and by as much as 5.5% in Belgium, which took first place.

Consumer prices in August rose by 0.9% in Latvia and by only 0.7% in Lithuania. The price increase in Lithuania was the lowest in the eurozone. In Finland, prices rose by 1.1%.

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