Annual inflation in the euro area eased to 2.0 % in December 2025, down from 2.1 % in November, according to a flash estimate released today by Eurostat, the statistical office of
the European Union. The figure brings price growth in line with the European Central Bank’s long-standing target level.
The preliminary data indicate that the slowdown was broad-based, with services inflation remaining the largest contributor at 3.4 %, albeit slightly lower than the 3.5 % recorded in November. Food, alcohol and tobacco prices rose 2.6 % year-on-year, while non-energy industrial goods posted a more moderate increase of 0.4 %. Energy prices continued to exert downward pressure, falling by 1.9 % in annual terms [1].
The flash estimate, which provides an early snapshot of price dynamics across the 20 countries using the euro, underscores the gradual disinflation that has taken hold across the currency bloc. While still above pre-pandemic norms, the deceleration suggests that inflationary pressures are continuing to ease as energy costs remain subdued and demand growth stabilizes [2].
Eurostat also highlighted upcoming methodological changes to the ‘Harmonised Index of Consumer Prices (HICP)’. Effective 4 February 2026, the index will be rebased to 2025 = 100 and aligned with the updated European Classification of Individual Consumption According to Purpose (COICOP) version 2, bringing new categories — including “games of chance” — into the measurement framework [3].
The annual inflation figure of 2.0 % was last matched in August 2025, and economists say the latest data may reinforce expectations that price growth will hover around the ECB’s target in the early months of 2026.
Links:
[1]: https://ec.europa.eu/eurostat/web/products-euro-indicators/w/2-07012026-ap "Euro area annual inflation down to 2.0% - Euro indicators - Eurostat"
[2]: https://www.investing.com/news/economic-indicators/eurozone-annual-inflation-slows-to-20-eurostat-data-shows-4434503?utm_source=chatgpt.com "Eurozone annual inflation slows to 2.0%, Eurostat data shows By Investing.com"
[3]: https://www.bta.bg/en/news/economy/1038958-euro-area-annual-inflation-down-to-2-0-in-december-2025?utm_source=chatgpt.com "BTA :: Euro Area Annual Inflation Down to 2.0% in December 2025"
Photo by Lionel Allorge, Wikimedia commons.