The Eurozone avoids tariffs and the geopolitical crisis and says goodbye to 2025 with inflation at 2%
The Eurozone managed to avoid the blows of a turbulent 2025 due to the tariff war and geopolitical tensions (Ukraine, the Middle East, China…), at least as far as inflation is concerned. The area would have ended the year with a CPI rate of 2%, in line with the medium-term objective that the European Central Bank (ECB) has set, according to the progress of the data made public this Wednesday by Eurostat, the European statistics office.
The annual CPI rate moderates by one tenth compared to the previous month, largely due to the effect of energy, which became cheaper by 1.9% year-on-year, when in November it had fallen only 0.5%. On the opposite side are the prices of fresh foods, which became more expensive by 4.2% year-on-yearone point more than in November, coinciding with Christmas.
Last month, the rise in services prices also moderated, by one tenth to 3.4%, which is one of the variables that most worried the ECB due to its possible impact in the form of second round effects -The rise in prices causes an increase in prices and salaries by companies, which generates an inflationary spiral.
Core inflation, which excludes the impact of energy and fresh food from its calculation, fell one tenth to 2.3% in December. This reference is relevant because it usually shows whether price tensions are a temporary or structural problem.
The lowest annual inflation rates were recorded last month in Cyprus (0.1%), France (0.7%) and Italy (1.2%), while the largest price increases were recorded in Estonia and Slovakia (4.1% each) and Austria (3.9%). In the case of Spain, the year-on-year increase in prices last month was 3%, two tenths less than in November, which reduced the unfavorable price differential with respect to the eurozone to one percentage point.
