Eurozone Core Inflation Set To Remain At 1% In 2018

Eurozone core inflation is likely to remain at 1.0 percent throughout this year amid weak wage growth, Christoph Weil, an economist at Commerzbank, said.

The core inflation rate, which excludes prices of energy, food, alcohol and tobacco remained stable at 0.9 percent in December, data from Eurostat showed on January 5.

Meanwhile, the headline inflation rate dropped slightly to 1.4 percent in December from 1.5 percent in November.

The drop was mainly due to the declining inflation rate for energy, which fell from 4.6 percent in November to 3.0 percent in December, the economist observed.

The recent inflation data showed strong economic growth and the noticeable fall of unemployment have so far not led to a lasting stronger underlying upward price trend and little is likely to change in 2018, Weil noted.

“A major factor pointing to this is the still weak wage growth,” the economist added.

Commerzbank sees core inflation of 1.0 percent in 2018 and expects the rate to lastingly rise above 1 percent only in 2019.
Source: RTT News

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