The growth rate of the price level in the euro area exceeded two percent in July. This happened for the first time in three years. However, the European Central Bank is likely to leave its loose monetary policy unchanged for the time being.
The inflation rate in the euro area, measured by the year-on-year increase in the harmonized index of consumer prices, reached 2.2 percent in July. Even in June, it was just below the 2% mark. This follows from current Eurostat data. It is also the first time in a long time that prices have risen in all euro-paying countries. In June, Portugal was the only eurozone country to experience deflation, and in May, prices fell in Greece.
Prices grew the fastest in Estonia, by 4.9 percent, the slowest in Malta, where the year-on-year increase was only 0.3 percent. The average growth in the price level of the European Union was 2.5 percent, and also within the European 27 the largest increase occurred in Estonia. Inflation remained above 4% in Poland, Hungary and Lithuania, with more than 3% in Romania, Luxembourg and Germany.
The inflation rate in the euro area is now practically at the target of the European Central Bank, which has recently slightly modified it. Towards two percent in the medium term. The ECB is unlikely to change its policy in the foreseeable future.