Euro zone inflation remained steady at 2.2% in April, failing to meet expectations for a decline, according to preliminary figures released by Eurostat on Friday.
Analysts surveyed by Reuters had projected a drop to 2.1% for April, in light of the previous month’s rate of 2.2%, suggesting that inflation was gradually aligning with the European Central Bank’s target of 2%.
Excluding volatile components such as food, energy, alcohol, and tobacco, core inflation rose to 2.7%, up from March’s 2.4%. Meanwhile, the inflation rate for services also experienced an increase, reaching 3.9% compared to a previous rate of 3.5%.
Major economies within the euro zone have begun to share their latest harmonized inflation data. The German statistics office stated on Wednesday that it anticipated consumer prices in the country would increase by 2.2% in April, slightly surpassing expectations yet lower than the figure from the previous month. French harmonized inflation was reported at 0.8%, also marginally exceeding forecasts.
ECB President Christine Lagarde remarked on Finance Newso last week that the institution is on track toward its inflation target for 2025, emphasizing that the disinflationary trend is progressing well.
However, Lagarde and other central bank officials cautioned that the medium-term outlook for inflation remains uncertain due to potential retaliatory measures from Europe in response to U.S. tariffs and significant fiscal changes like Germany’s comprehensive infrastructure package.
Lagarde noted that the ECB would adopt a highly data-driven approach when making future interest rate decisions. The bank’s most recent interest rate cut occurred last month, lowering the key deposit facility rate to 2.25%, down from a peak of 4% in mid-2023.
Earlier data published this week pointed to a potential uptick in the euro zone economy, with gross domestic product (GDP) in the bloc growing by 0.4% in the first quarter of 2025, surpassing the forecasted 0.2%. This figure follows a revised growth rate of 0.2% in the last quarter of 2024.
Nevertheless, analysts anticipate a slowdown in growth in the months ahead, primarily due to the implications of global tariffs.
This report is ongoing, and updates will follow as more information becomes available.
