uploads///Eurozone Inflation in June

Eurozone Inflation Rose to a 16-Month High in June

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Aug. 1 2018, Updated 6:34 a.m. ET

Eurozone inflation in June 2018

On a year-over-year basis, the Eurozone Inflation (VGK)(IEV) Index stood at 2.0% in June compared to 1.9% in May, according to data provided by Eurostat. The index met the preliminary expectation of a 1.9% improvement.

The inflation figure in June was mainly due to improvement in the prices of food products and energy products. Its core inflation is an important measure of the European Central Bank in its policy decision-making process. Its core inflation metric excludes energy, alcohol, tobacco, and unprocessed food. Core inflation stood at 0.9% in June compared to 1.1% in May.

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Economic impact

Among the various member countries of the Eurozone, France, Spain, and Germany posted stronger inflation figures in June. Although various manufacturing products showed stronger inflation, services showed a softer rise in its inflation. Overall stronger inflation in the economy signals that consumer demand for goods and services has been improving gradually.

The Vanguard FTSE Europe ETF (VGK) and the iShares Europe ETF (IEV) track the performance of the Eurozone (N100-INDEX). VGK and IEV dropped 3.1% and 3.5%, respectively, in June.

In the next part of this series, we’ll analyze the performance of the Eurozone Consumer Confidence so far in July.

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