Eurozone Inflation Eases to 2.2% in March

The annual inflation rate in the euro area declined to 2.2% in March 2025, down from 2.3% in February, according to data released by Eurostat, the statistical office of the European Union. Across the broader EU, inflation also moderated to 2.5%, compared to 2.7% in the previous month, highlighting a steady trend of disinflation across the region.

Inflation Rates Across Member States

Among EU member countries, France recorded the lowest annual inflation rate at 0.9%, followed by Denmark at 1.4% and Luxembourg at 1.5%. On the other end of the spectrum, the highest inflation was seen in Romania (5.1%), Hungary (4.8%), and Poland (4.4%).

When compared to February, annual inflation declined in sixteen EU member states, remained unchanged in one, and increased in ten. This uneven pace of inflation normalization reflects varying national responses to economic and energy market conditions.

Key Drivers of Inflation in the Euro Area

The largest contributor to the euro area’s annual inflation in March was the services sector, which added 1.56 percentage points. Food, alcohol, and tobacco followed, contributing 0.57 percentage points. Non-energy industrial goods added 0.16 percentage points, while energy prices had a negative contribution of 0.10 percentage points.

These figures reflect broader trends in spending and pricing, with energy prices continuing to decline from their previous highs and services remaining a key inflation driver amid solid demand.

As the European Central Bank continues to assess inflation dynamics, the latest figures support the case for a cautious policy stance. With headline inflation nearing the ECB's 2% target, further developments in wage growth and energy prices will be closely monitored for their potential influence on monetary policy decisions.

Source: Eurostat

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