In October, annual inflation across the euro area slowed to 2.9 percent, marking the weakest pace since July 2021. This softer rate was reported by Eurostat, the European Union’s statistics office, as part of its regular monthly update. The figures align with the preliminary forecast that Eurostat published at the end of October, confirming the early estimate for the month and providing a clearer view of price dynamics across the shared currency region.
Eurostat also noted that inflation within the European Union as a whole eased to 3.6 percent in October, the lowest observed since September 2021 for the broader bloc. These readings highlight a divergence between the euro area and the EU as a whole, reflecting different exposure to energy markets, supply chains, and domestic demand factors that influence price growth in member states.
Turning to the prior month, September saw inflation at 4.3 percent in the twenty countries sharing the euro and 4.9 percent across the twenty-seven EU members. Compared with October 2022, the euro area experienced a drastic year-on-year moderation, when inflation stood at 10.6 percent and 11.5 percent for the EU as a whole, underscoring a substantial cooling from the peak price pressures that followed the pandemic period.
Looking at core inflation, which excludes the more volatile components of energy and fresh food, the rate in the euro area settled at 5.0 percent. This reflects a meaningful decrease from September and continues a downward trajectory that contrasts with the elevated levels observed a year earlier, when core inflation reached 6.4 percent in October 2022.
By category, the principal driver of the 2.9 percent annual inflation in the euro area was the services sector, contributing 1.97 percentage points to the overall rate. Food, alcohol, and tobacco added 1.48 points, while non-energy industrial goods contributed 0.9 points. In contrast, energy provided a negative drag, subtracting 1.45 points from the overall inflation calculation, reflecting lower energy costs or favorable energy developments during the month.
Across individual countries, October showed price declines in certain places, notably Belgium with a 1.7 percent drop, the Netherlands down by 1 percent, and Denmark easing by 0.4 percent. These country-specific movements illustrate the heterogeneity of inflation within the euro area, driven by national circumstances such as local demand, taxation, and energy exposure.
On the flip side, some member states recorded higher inflation rates. Hungary stood out with 9.6 percent, followed closely by the Czech Republic at 9.5 percent and Romania at 8.3 percent, signaling persistent inflationary pressures in parts of Central and Eastern Europe that can influence broader regional dynamics.
Spain saw inflation rise to 3.5 percent in October, a gain of two tenths from September but still well below the 7.3 percent peak reached in October of the previous year. Among the major euro-area economies, France posted 4.5 percent, Germany 3.0 percent, and Italy 1.8 percent for October, illustrating a spread of inflation pressures across the bloc that varies by country and economic structure.
Compared with September, inflation fell in 22 member states and rose in five during October, according to Eurostat’s month-to-month comparison. The broader pattern indicates a continued but uneven cooling of price growth across the euro area, with some economies still grappling with levels of inflation that influence purchasing power, wages, and monetary policy decisions.