Lower prices for phone calls, clothing and vegetables have slowed consumer price growth in December as expected, despite rising fuel and cigarette prices in the euro area, data showed on Wednesday.
According to the data, the core inflation rate monitored by the ECB remained flat.
Consumer price inflation in the 19-nation eurozone was 0.4 percent on a monthly basis in December and 1.4 percent year on year, down from 1.5 percent in November, the European Union’s statistics office said.
Among all components, energy prices posted the biggest annualized increase of 2.9 percent in December, while the price of unprocessed food rose 1.9 percent. Excluding these two extremes, or what the ECB calls core inflation, prices rose 1.1 percent year-on-year, the same rate as in November and October.
Some economists argue that the best measure of core inflation is not only excluding energy and unprocessed foods, but also alcohol and tobacco, goods whose prices are usually affected by changes in government taxes.
But the measure also stabilized at 0.9 percent in December, unchanged from the previous two months.
The ECB wants to keep inflation below 2 percent in the medium term and buys government bonds on the secondary market to pump more liquidity into the banking system to stimulate credit in the economy.
But as the eurozone economy grows at its fastest pace in a decade and unemployment hits nine-year lows, this has yet to translate into a much faster rate of growth.
