Eurozone inflation hits highest since 2023, while GDP growth slows

(Sharecast News) - Consumer price inflation across the eurozone jumped to its highest rate in two and a half years in April as energy costs jumped, according to Eurostat on Thursday, while data showed economic growth had slowed in the first quarter.

The annual rate of change in consumer prices was 3.0% this month, up from 2.6% in March, according to preliminary estimates from Eurostat.

This was slightly ahead of the 2.9% rate expected by analysts and the highest level of inflation since September 2023.

The primary reason was a 10.9% surge in energy prices year-on-year, up from just 5.1% in March, as conflict between the US and Iran resulted in large-scale disruptions to oil trade during the month with the Strait of Hormuz essentially closed.

Service-sector inflation slowed to 3.0% from 3.2% in March, while food, alcohol and tobacco inflation picked up to 2.5% from 2.4% and non-energy industrial goods inflation rose to 0.8% from 0.5%.

However, core inflation, which excludes the volatile food and energy elements, eased to an annual rate of 2.2% from 2.3%.

Meanwhile, Eurostat also released its preliminary estimates for gross domestic product over the first quarter, which showed that the single-currency region expanded by 0.1% during the period, following 0.2% growth in the fourth quarter.

In annual terms, GDP was 0.8% higher than the previous year, slowing from the 1.2% growth registered in the fourth quarter, coming in below the 0.9% expected by economists. This was the lowest rate of expansion since the second quarter of 2024.