In October 2023, Eurostat predicts a decrease in inflation in the Euro area to 2.9% from 4.3%, driven by a significant -11.1% decrease in energy prices, along with a 0.1% decline in GDP.
Decelerates in October 2023 Eurostat's preliminary flash estimate for October 2023 signals a decline in the Euro area's annual inflation rate to 2.9%, down from September's 4.3%. This deceleration is influenced by diverse trends within the CPI components.
Key components such as food, alcohol, and tobacco contribute to Euro area inflation with a slightly reduced rate. The estimate for October is 7.5%, compared to 8.8% in September. Services, another significant segment, is also anticipated to experience a marginal decline to 4.6% in October from 4.7% the previous month. Non-energy industrial goods follow a similar trend, projected at 3.5% for October, down from 4.1% in September.
Notably, energy prices exhibit the most notable shift, with an anticipated annual rate of -11.1% in October, marking a significant change from -4.6% in September. This sharp decline underscores the broader challenges in energy markets and their impact on inflation.
The preliminary flash estimate from Eurostat sheds light on the economic performance of the Euro area and the EU compared to previous quarters.
During the third quarter of 2023, the Euro area experienced a 0.1% seasonally adjusted GDP contraction, while the EU witnessed a 0.1% growth. This marginal upturn in the EU contrasts with the third quarter of 2022, which showed a similar 0.1% rise in both areas.
In the second quarter of 2023, the Euro area's GDP expanded by 0.2%, while the EU's GDP remained stable, indicating no significant changes.
The data suggests a cooling off of economic activity in the Euro area, while the EU maintains a stable, albeit modest, growth trajectory. In the short term, this points to a bearish outlook for the Euro area, with the EU continuing to exhibit slight positive trends."
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