BRUSSELS, July 1 (Xinhua) -- Annual inflation in the eurozone is expected to fall to 2.8 percent in June from 3.2 percent in May, according to a flash estimate released on Wednesday.
The fall was mainly driven by easing energy price pressures. Energy prices are expected to rise 8.7 percent year-on-year in June, down from 10.8 percent in May, according to Eurostat, the statistical office of the European Union. Services inflation is also expected to ease to 3.2 percent from 3.5 percent a month earlier.
Food, alcohol and tobacco prices are estimated to rise 1.6 percent year-on-year, down from 1.9 percent in May, while non-energy industrial goods are expected to post an annual inflation rate of 0.9 percent, unchanged from May. Core inflation, which excludes energy, food, alcohol and tobacco, is estimated at 2.4 percent in June, down from 2.6 percent in May.
Among the eurozone's largest economies, Germany's annual inflation rate is expected to be 2.4 percent in June, down from 2.7 percent in May. France's inflation is estimated to fall to 2.0 percent from 2.8 percent, while Italy's is expected to ease to 3.1 percent from 3.2 percent. Spain's inflation is estimated to remain unchanged at 3.6 percent, according to Eurostat data.
Among eurozone members with available data, Lithuania is estimated to have posted the highest annual inflation rate in June at 5.5 percent, while Malta is estimated to have posted the lowest at 1.9 percent.
The inflation outlook for the eurozone appears to be turning more dovish for the European Central Bank(ECB), which is currently holding its annual off-site meeting in Sintra, Portugal. ECB President Christine Lagarde opened the conference by saying that the central bank does not need to be as forceful in fighting inflation as it was in 2022.
Uncertainty surrounding the Middle East deal remains a key factor. Bert Colijn, ING's chief economist for the Netherlands, said the ECB is likely to welcome more time to assess how the situation develops and whether any further policy force will still be necessary.
The June Eurosystem staff projections foresee headline inflation at 3.0 percent in 2026, 2.3 percent in 2027 and 2.0 percent in 2028. ■