Financial expert explains: Inflation in the Eurozone is weakening - analysis and outlook

Financial expert explains: Inflation in the Eurozone is weakening - analysis and outlook

According to a report by www.zeit.de, inflation in the Eurozone has continued to weaken. Compared to the same month last year, consumer prices rose by 2.9 percent in October, which confirms the flash estimate from the statistical office Eurostat. This represents the largest reduction since summer 2021, after more than 10 percent was recorded at times in autumn 2022 and inflation was 4.3 percent in September 2023. Food and other luxury goods remained more expensive than last year, but the price increase has moderated. Services saw a slight slowdown in price increases, while energy prices fell 11.2 percent compared to the same month last year. In Germany, the inflation rate in October was 3.0 percent, slightly above the Eurozone average, while Croatia and Slovakia were well above the average at 6.7 percent and 7.8 percent, respectively. The EU Commission assumes that inflation rates in Germany (3.1 percent) and in the Eurozone (3.2 percent) will be above the European Central Bank's target of 2.0 percent next year.

The reduction in inflation to 2.9 percent compared to the same month last year in the Eurozone could have a positive impact on the market. Lower inflation could strengthen consumer purchasing power and contribute to a gradual economic recovery as consumers get more for their money. In addition, a lower inflation rate could have a positive impact on the performance of assets, as lower inflation rates are often associated with lower interest rates. This could lead to increased demand for assets that are traditionally more attractive when interest rates are low, which in turn could impact the financial industry.