Eurozone Sees Increase in February Inflation

(MENAFN) Inflation across the eurozone edged higher last month, with fresh data pointing to persistent price pressures in key sectors despite an overall trajectory toward the European Central Bank’s target. A flash estimate published Tuesday by Eurostat, the statistical office of the European Union, put annual inflation at 1.9 percent in February, accelerating from 1.7 percent in January.

Services continued to drive the steepest price gains, with the sector’s annual rate climbing to 3.4 percent from 3.2 percent the prior month. Food, alcohol, and tobacco held steady at a 2.6 percent year-on-year increase, while non-energy industrial goods rose 0.7 percent — up sharply from 0.4 percent in January. Energy costs offered some relief, falling 3.2 percent annually, though the pace of decline slowed compared to the 4.0-percent drop recorded in January. Core inflation, stripping out energy, food, alcohol, and tobacco, came in at 2.4 percent.

Across the bloc’s major economies, the picture was mixed. Germany’s annual rate dipped slightly to 2.0 percent from 2.1 percent, while Spain rose to 2.5 percent from 2.4 percent. France registered 1.1 percent, and Italy posted the sharpest monthly jump — surging to 1.6 percent from just 1.0 percent in January, Eurostat data showed.

The ECB has acknowledged that inflation is drawing closer to its 2 percent medium-term goal, though officials remain vigilant as underlying price pressures persist in certain sectors. Policymakers continue to scrutinize incoming economic data as they weigh the path forward for price stability and growth across the euro area.

ING Chief Economist Bert Colijn flagged ongoing concerns, warning that February’s readings revealed a rise in core inflation, indicating that price pressures have not fully eased in the eurozone. He noted that energy supply risks stemming from the Middle East conflict could push inflation higher, keeping the ECB on high alert.

Colijn pointed to the bloc’s growing dependence on liquefied natural gas as a key vulnerability, noting that global LNG prices have surged since the weekend. He cautioned that the longer the conflict continues, the greater the impact is likely to be on eurozone inflation and economic growth.

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