Eurozone inflation rate revised downward; February inflation outlook compared with the United States

In the latest analysis released by Pantheon Macroeconomics, researchers Bistecen and Amajuli point out that inflation rates in the Eurozone are expected to slow down more than previously forecasted. According to Jin10 reports, the latest inflation statistics from Germany and Spain are the main factors leading to this revised outlook. Interestingly, this movement highlights a divergence from the inflation rate in the United States.

Upward Revision of January Outlook Based on Data from Germany and Spain

Pantheon Macroeconomics predicts the Eurozone’s inflation rate for January to be 1.8%. This is an upward revision from the previous estimate of 1.6%. Regionally, it was found that energy prices in Germany are easing, while inflation in food and core goods remains unexpectedly strong. In Spain, overall inflation is subdued due to base effects, but core inflation—excluding volatile components—remains stable.

Contradictory Pressures: Energy Cost Reduction vs. Service Sector Inflation

In Germany, the growth rate of gas and electricity prices has been restrained, but inflation in the service sector remains persistent, offsetting the benefits of lower energy costs. This structural inflationary pressure suggests it may not be a temporary phenomenon but could reflect wage increases and demand adjustment processes.

Robust Economic Growth and Employment Support Steady Interest Rates

Strong GDP data in Q4 2025 and stable unemployment rates in the Eurozone support the European Central Bank’s cautious stance on interest rate policy. Despite the inflation rate falling short of expectations, the resilience of the real economy makes it difficult to implement rapid rate cuts. This situation contrasts with the persistent high inflation in the United States, potentially accentuating the divergence in monetary policy approaches between the two regions.