According to the latest forecasts from STATEC, the inflation rate is expected to grow substantially this year, to 1.8% compared to 0.3% in 2016.
This rise has already been evident over recent months, said STATEC, at 1.7% this January, compared to just 0.5% in October 2016.
Rising oil prices have played a significant role in the recorded expansion and, if oil prices seen in early February remain constant, the will be 10% higher overall in 2017 than for last year. This effect should disappear in 2018, said STATEC, bringing inflation back down to 1.6%, even though underlying inflation is increasing -- 1.4% in 2017 and 1.7% in 2018 -- boosted by wage indexation adjustments, the favourable economic climate and the recovery in commodities prices.
According to STATEC, inflation is expected to recover in a similar fashion across the Euro zone. In its latest forecasts, the European Commission predicted an inflation rate of 1.7% for 2017 and 1.4% for 2018.
The Commission and STATEC recently upgraded their forecasts for 2017, from +0.3 and +0.4 percentage points respectively, compared to those for November.
