Euro Area Inflation Continues to Decline in March

The inflation rate in the euro area was 2.4% in March 2024, as per the latest Eurostat data. This is the annual rate of change, and thus indicates how much prices have changed compared to March 2023. 

A rate of 2.4% indicates a slight decrease from the 2.6% observed in February 2024. As shown in the chart below, it also represents a continuation of the decline in inflation that started in late-autumn of 2022. At it’s peak, euro area inflation stood at 10.6% in October 2022. 

The annual inflation rate of 2.4% equals the November 2023 rate, and is the lowest on record since July 2021.

Food and goods inflation have come down in recent months, however services prices have remained sticky and stood at 4.0% in March. 

The euro area consists of those EU Member States that have adopted the euro as their currency: Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Croatia, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland. 

A closer look at country level data shows that inflation rates spans from 4.9% in Croatia to Lithuania at 0.3%. Together with Croatia, Austria and Estonia also have inflation rates above 4%, while Latvia and Finland have rates of 1% or lower together with Lithuania.

The chart below shows how the inflation rate has developed over the past five years in all euro area countries. We can see the rise in the inflation rate across all countries starting in 2021, with the average euro area annual rate peaking at above 10% in the autumn of 2022. Since then most countries have seen rates steadily decline, however in the past months the rate has declined less than in autumn of 2023.

Read more: