Eurozone economy exits recession as inflation holds steady
Eurozone inflation remained unchanged at 2.4 per cent in April compared with March, according to a preliminary estimate released by the European statistics agency Eurostat. Figures also showed that the eurozone economy grew by 0.3 per cent in the first quarter of this year, officially ending the recession.
Compared with the month before, prices for food, alcohol and tobacco rose slightly more in April. Although energy prices fell compared to April 2023, the decrease was smaller than in March 2024. On the other hand, price increases for services slowed slightly.
Consumer goods prices in the euro area rose by 0.6 per cent month on month. Core inflation, which excludes the volatile prices of energy, food, alcohol and tobacco, fell to 2.7 per cent. In March, core inflation was 2.9 per cent.
Inflation target in sight
Inflation in the eurozone is approaching the European Central Bank's (ECB) target of 2 per cent. Financial markets therefore expect the ECB to start cutting interest rates in June.
Earlier this month, ECB president Christine Lagarde said governments should scale back their support for rising energy prices in recent years, describing it as the only way to bring inflation down in a sustainable way.
Eurostat also released preliminary economic growth figures on Tuesday, showing that the eurozone economy grew by 0.3 per cent in the first quarter compared to the previous quarter. This brings the eurozone out of a mild recession, after it contracted by 0.1 per cent in each of the previous two quarters.
© PHOTO KIRILL KUDRYAVTSEV / AFP
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