March 2 (UPI) — The eurozone’s annual inflation rate fell for the fourth successive month in February helped by a large fall in the pace at which energy prices are rising, according to European Union figures out Thursday.
However, the decrease of just 0.1% left Consumer Price Inflation virtually unchanged at 8.5% and may be an indication that the rapid fall seen in recent months may be leveling off, preliminary figures from Eurostat, the EU’s statistics office, show.
Last month’s inflation rate came in at 8.6%, after initially being estimated at 8.5%.
Prices in the 20 countries that use the euro have fallen every month since November with inflation now at its lowest level since June.
While rising food, alcohol and tobacco and energy prices continue to be the main contributors to inflation, energy price inflation dropped by more than 5% compared to January while the pace at which food, alcohol and tobacco prices are increasing jumped by another 0.9% from January.
Inflation in the bloc now appears to have peaked in October, at 10.6%.
However, core inflation, which does not include energy and food due to their volatility, saw its fourth successive monthly rise, increasing 0.3% to a new record of 5.6%. Core inflation numbers are often considered bellwethers for future inflation trends.
The latest figure is more than double the 2.7% rate posted in February 2022.
The statistics also show a huge variation in the inflation rates of the different countries that share the euro.
Inflation in Spain and France, which have low inflation relative to many of their neigbors, rose by 0.2% in both economies to 6.1% and 7.2% respectively.
At the other end of the spectrum eurozone countries battling some of the highest inflation rates in the western world made great strides in reducing it.
Latvia’s inflation rate fell 1.3% from 21.4% to 20.1%, while Estonia’a decreased from 18.6% to 17.8%.
Wednesday’s inflation report comes two weeks after the European Commission forecast the EU economy was likely to avoid a recession, but that headwinds from high energy costs and inflation would limit recovery moving forward.
The EU’s Winter 2023 Economic Forecast projects the eurozone to grow by 0.9% this year, while growth across the entire 27-member countries of the European Union is expected to be slightly lower at 0.8%.
“A better than previously expected turnout for growth at the end of last year and improving economic sentiment suggest that the EU economy is thus set to narrowly escape the technical recession that was projected back in autumn,” said Paolo Gentiloni, EU commissioner for economy, said.
The performances, however, were sharply down from forecasts for 2022 which showed EU growth estimated at 3.5%. GDP growth for 2024 was also limited to 1.6%, and 1.5% in the eurozone in part due to concerns over the war in Ukraine and inflationary pressures.