The inflation rate, measured by the Harmonized Index of Consumer Prices (HICP), in the 20 countries of the single currency fell from 2.6% in February to 2.4% in March, a sharper decline than expected, according to the flash estimate released today by Eurostat. In Portugal, the same indicator was 2.3%.
Economists consulted by the Bloomberg agency expected a slightly smaller drop, to 2.5%. Underlying inflation, which removes the most volatile products from the accounts (energy and fresh food), also fell more than expected, standing at 3.1% (3.3% in February).
The result keeps alive expectations of a relief from the more restrictive monetary policy of the European Central Bank, which has kept interest rates at a high level to try to cool the economy and, in this way, counteract the generalized increase in prices.
The president of the ECB has already admitted a cut in interest rates in the summer, but has pointed to the data from April and May as the most relevant to cement confidence that inflation is under control and maintaining a downward path towards the 2% objective. , far from the peak of 10.6% that this indicator recorded in October 2022.
The ECB’s board of governors, responsible for monetary policy, meets on Thursday next week (11 April), in Frankfurt.
Most countries that share the euro still have a HICP above 2%. It was feared that the low Easter, still in March, could push inflation up, due to the rising prices of holiday and travel packages, but this ended up not happening, according to these provisional data, despite being precisely the sector of services where this indicator remains higher, due to wage pressure.
“Looking at the main components of inflation in the euro zone, the highest year-on-year variation is expected in services (+4%, stable compared to February), followed by food, alcohol and tobacco (2.7%, compared to 3. 9% in February), non-energy industrial goods (1.1%, compared to 1.6% in February) and energy (-1.8%, compared to -3.7% in the previous month).”
