Inflation in some of the largest European economies turned out to be lower than 2 percent.
FRANKFURT, Aug. 1 (Xinhua) -- Inflation in the euro area is expected to stand at 2 percent in July, as rising prices in some categories were offset by a 2.5 percent drop in energy prices, Eurostat, the statistical office of the EU, announced on Friday.
Prices of food, alcohol and tobacco hiked in July at a faster pace than June with an increase of 3.3 percent. Prices of services soared by 3.1 percent, slightly down from 3.3 percent in the previous month. Non-energy industrial goods also saw a modest increase of 0.8 percent.
Inflation in some of the largest European economies turned out to be lower than 2 percent, with 1.8 percent in Germany, 1.7 percent in Italy and 0.9 percent in France. In contrast, Estonia recorded the highest inflation rate at 5.6 percent, followed by Croatia and Slovakia, both at 4.5 percent, according to Eurostat.
According to a separate report from the Croatian Bureau of Statistics (CBS), Croatia's annual inflation rate rose to 4.1 percent in July. Key drivers included a 6.6 percent increase in prices for food, beverages, and tobacco, and a 5.7 percent rise in service costs. This marks the third consecutive month of rising inflation in Croatia.
Croatian Deputy Prime Minister and Finance Minister Marko Primorac stated that the government expects the average annual inflation rate for 2025 to be around 3 percent, with inflation projected to slow toward the end of the year.
The euro area inflation has been hovering around 2 percent since February this year with some minor fluctuations, according to Eurostat. This aligns closely with the European Central Bank (ECB)'s inflation target.
However, Bert Colijn, chief economist for the Netherlands at ING, cautioned that the streak is unlikely to continue for long.
The ECB noted in a statement released last month that longer-term inflation expectations remain near its 2 percent target, reflecting market confidence in its price stability mandate.
The ECB put interest rates on hold at its July rate-setting conference as the 2 percent inflation rate puts the central bank "in a good place."
