High prices of economic services in Europe
2024-08-13
■ The real GDP growth rate in the Eurozone increased by 0.3% compared to the previous quarter, maintaining almost the same growth rate, but Germany experienced negative growth, indicating an economic downturn.
■ The continuous significant increase in service prices has hindered the trend of slowing inflation.
From April to June 2024, the real GDP growth rate of the eurozone (preliminary data, a month-on-month increase of 0.3%) maintained almost the same growth rate as from January to March. Spain and other countries continued to record high growth, while the economies of France and Italy also showed strong momentum. However, after two quarters, Germany experienced negative growth again, confirming the economic downturn.
In the Eurozone Business and Consumer Survey for July 2024, the sentiment index (95.8, a decrease of 0.1 percentage points from the previous month) showed a slight decline for two consecutive months. Classified by industry, the prosperity index of manufacturing, service, and retail sectors has declined, and the expansion speed of service industry activities that are driving current growth has also slowed down. In addition, the sales price expectation index for the service industry has dropped to its lowest level since June 2021, while the manufacturing industry has risen to levels since April 2023, indicating that the pace of commodity price adjustments is slowing down.
The Eurozone Consumer Price Index (HICP) growth rate for July 2024, which increased by 2.6% year-on-year, has accelerated again within two months. The core HICP (up 2.9% year-on-year), which reflects the primary trend of prices, excluding energy, food, alcohol, and tobacco, has maintained the same growth rate for three consecutive months. The high service prices persist, and the trend of slowing inflation has been hindered.
■ The continuous significant increase in service prices has hindered the trend of slowing inflation.
From April to June 2024, the real GDP growth rate of the eurozone (preliminary data, a month-on-month increase of 0.3%) maintained almost the same growth rate as from January to March. Spain and other countries continued to record high growth, while the economies of France and Italy also showed strong momentum. However, after two quarters, Germany experienced negative growth again, confirming the economic downturn.
In the Eurozone Business and Consumer Survey for July 2024, the sentiment index (95.8, a decrease of 0.1 percentage points from the previous month) showed a slight decline for two consecutive months. Classified by industry, the prosperity index of manufacturing, service, and retail sectors has declined, and the expansion speed of service industry activities that are driving current growth has also slowed down. In addition, the sales price expectation index for the service industry has dropped to its lowest level since June 2021, while the manufacturing industry has risen to levels since April 2023, indicating that the pace of commodity price adjustments is slowing down.
The Eurozone Consumer Price Index (HICP) growth rate for July 2024, which increased by 2.6% year-on-year, has accelerated again within two months. The core HICP (up 2.9% year-on-year), which reflects the primary trend of prices, excluding energy, food, alcohol, and tobacco, has maintained the same growth rate for three consecutive months. The high service prices persist, and the trend of slowing inflation has been hindered.