Inflation in the eurozone falls back to single digits as downward trend continues

Annual inflation across the eurozone fell back to the single-digit territory and stood at 9.2% at the end of December, according to a flash estimate released by Eurostat on Friday morning.

Inflation started easing in November but still stood at 10.1%.

It comes as gas prices, one of the main drivers behind last year’s record-breaking inflation, returned to pre-war levels amid unusually warm weather.

Although the news can be seen as a positive development, the eurozone’s inflation rate represents almost five times the 2% target set by the European Central Bank.

The majority of member states that use the euro as currency saw inflation decrease over the past month, with a marked drop in Germany, from 11.3% in November to 9.6% in December.

Spain (5.6%), Luxembourg (6.2%) and France (6.7%) recorded the lowest inflation rates across the bloc, while Latvia (20.7%), Lithuania (20%) and Estonia (17.5%) again saw the highest levels.

Energy inflation receded sharply, from 34.9% in November to 25.7% in December, while fresh food saw a more moderate contraction, from 13.8% to 12.% over the last month.

However, core inflation, which excludes the volatile prices of energy, food and tobacco and therefore gives a more accurate picture of the state of the economy, increased from 5% in November to 5.2% in December.

In total, nine out of the 19 eurozone members remain in double-digit territory.

Croatia, which adopted the euro at the start of 2023, was not included in the computation.