In December 2021, the Euro area annual inflation rate is expected to increase to 5.0 per cent, 0.1 per cent higher than the 4.9 per cent booked in November 2021, based on the latest estimates coming from the statistical office of the European Union (Eurostat).

However, it was noted that a year earlier the annual rate was -0.3 per cent in December 2020. Eurostat reports that the main component that has the highest contribution to the annual Euro area inflation rate in December 2021 is energy.

Energy which is expected to decrease from 27.5 per cent in November to 26 per cent, followed by food, alcohol & tobacco, which is expected to climb to 3.2 per cent from 2.2 per cent reported in November.

Non-energy industrial goods are estimated to increase to 2.9 per cent, compared with 2.4 per cent in November and Services are projected to decrease to 2.4 per cent, down from 2.7 per cent in November.

The lowest annual rates were observed in Malta (2.6 per cent), Portugal (2.8 per cent), and Finland (3.2 per cent). The highest annual rates were recorded in Estonia (12 per cent), Lithuania (10.7 per cent) and Latvia (7.7 per cent).

When compared with the previous month, during December 2020, among the member states annual inflation was stable in two, decrease in four, and rose in 13.