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Inflation at -2.9%

17/09/2020 15:06

In August 2020, a month in which COVID-19 containment measures continued to be lifted, the euro area annual inflation rate was -0.2%, down from 0.4% in July, according to figures published today by Eurostat, the statistical office of the European Union.

A year earlier, the rate was 1.0%. European Union annual inflation was 0.4% in August 2020, down from 0.9% in July. A year earlier, the rate was 1.4%.

According to Eurostat, the lowest annual rates were registered in Cyprus (-2.9%), Greece (-2.3%) and Estonia (-1.3%). The highest annual rates were recorded in Hungary (4.0%), Poland (3.7%) and Czechia (3.5%).

Compared with July, annual inflation fell in sixteen Member States, remained stable in five and rose in six. In August, the highest contribution to the annual euro area inflation rate came from food, alcohol & tobacco (+0.33 percentage points, pp), followed by services (+0.30 pp), non-energy industrial goods (-0.03 pp) and energy (-0.77 pp).

Meanwhile, the seasonally adjusted production in the construction sector in July rose by 0.2% in the euro area and fell by 0.1% in the EU, compared with June 2020, according to first estimates from Eurostat. In June 2020, production in construction increased by 5.1% in the euro area and by 3.8% in the EU. In July 2020 compared with July 2019, production in construction decreased by 3.8% in the euro area and by 3.9% in the EU.

In the euro area in July 2020, compared with June 2020, civil engineering increased by 1.1% while building construction remained stable. In the EU, building construction decreased by 0.3% while civil engineering increased by 1.2%. Among Member States for which data are available, the highest increases were recorded in Slovenia (+12.2%), France (+5.0%) and Romania (+4.3%). The largest decreases were observed in Germany (-4.3%), Poland (-3.5%) and Sweden (-1.7%).

In the euro area in July 2020, compared with July 2019, building construction decreased by 4.3% while civil engineering increased by 0.4%. In the EU, building construction decreased by 4.2% and civil engineering by 0.4%. Among Member States for which data are available, the largest decreases in production in construction were observed in Hungary (-21.0%), Slovakia (-15.4%) and Poland (-11.0%). Increases were observed in Romania (+12.2%) and Finland (+2.5%).

Finally, according to Eurostat, weekly absences from work rose between the first and second week of March 2020 (weeks 10 and 11), due to initial government measures against the spread of COVID-19. The number of absences increased more sharply in subsequent weeks as a consequence of continued measures against the spread of the COVID-19 pandemic.

The number of employed people who were temporarily absent from work was four times higher at the end of March (week 13) compared with the beginning of that month (weekly absences rose from 10.8 million in week 10 to 41.2 million in week 13). Compared with the previous year, the number of absences in the last week of March 2020 was close to the seasonal peaks seen in mid-August and late December (where 53.4 million and 51.9 million people respectively were absent from work in 2019).

Throughout 2017 to 2019, temporary absences from work have peaked in mid-August and late December every year. The data - which measure the number of employed persons who are temporarily absent from work during reference weeks - showed that temporary absences peaked in week 33 and 52 during 2017-19.