Eurozone annual inflation stood at 2.7% in December 2011, compared with 3% in November (2.2% a year earlier), and EU annual inflation was 3% in December 2011, down from 3.4% the previous month (2.7% a year earlier), Eurostat announced, on 17 January. This downward trend seems to confirm the projections of most economists, who expect inflation in the eurozone to drop to around 2% in 2012.

In December 2011, the lowest annual rates were observed in Sweden (0.4%), Malta (1.3%) and Bulgaria (2%), and the highest in Slovakia (4.6%), Poland (4.5%) and Cyprus (4.2%). Compared with November 2011, annual inflation fell in 21 member states, remained stable in two and rose in two.

In the eurozone, the main components with the highest annual rates, in December 2011, were housing (4.9%), transport (4.3%) and alcohol and tobacco (3.8%), while the lowest annual rates were observed for communications (-1.9%), recreation and culture (0.6%) and education (0.9%). Concerning the detailed sub-indices, fuels for transport (+0.30 percentage points), heating oil (+0.15), gas and electricity (+0.12 each) had the largest upward impacts on the headline rate.

The main components with the highest monthly rates were recreation and culture (2%) and hotels and restaurants (1%), while the lowest monthly rate was observed for clothing (-1.3%). In particular, package holidays (+0.18 percentage points) and accommodation services (+0.07) had the largest upward impacts.