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Euro area’s final HICP inflation for the June is likely to come in same as the flash reading. According to a Societe Generale’s research report, the final HICP inflation for euro area is expected to confirm the flash estimate of 0.1 percent year-on-year in June, slightly higher than in May. This reading would be the highest since January 2016. According to the flash estimate, core inflation of the currency bloc rebounded slightly to 0.9 percent year-on-year.
Energy component recovered, declining 6.5 percent year-on-year, as compared with the decline of 8.1 percent year-on-year in May. Meanwhile, food prices continued to stay stable at 0.9 percent year-on-year. The slight rise in core inflation was due to a mild rebound in services inflation.
Non-energy industrial goods prices weakened slightly. The headline HICP inflation for the euro area is expected to continue improving noticeably in the second half of 2016 because of base effects from energy prices. Meanwhile, core inflation is expected to rebound gradually, said Societe Generale.
