Euro Area June Inflation Preview

Research evidence excerpt

Euro Area June Inflation Preview

Goldman Sachs

we expect energy inflation to decline further to 3.1%yoy from 5.6%yoy in May,

driven by a continued relief from declining fuel prices. We look for processed food

inflation to tick up to 0.2%yoy and unprocessed food inflation to increase to

4.8%yoy.

n We expect French headline inflation to fall to a strong 2.3%yoy in June from 2.8%yoy

in May, and core inflation to move down to 1.4%yoy, reflecting a slight decline in

both core goods and services inflation on a year-over-year basis. We expect a

4.9%mom nsa increase in accommodation services, with the seasonality this year

resembling 2024 rather than 2025, which saw a notably higher June reading, a

5.5%mom nsa increase in airfares and a 4.8%mom nsa decline for package holidays

after a surprisingly strong May. As for garments and footwear, we expect further

small increases, although seasonality this year remains somewhat uncertain. Outside

of core, we look for energy inflation to fall to 12.4%yoy from 16.3% in May, with

downward pressure coming from a 4.8% decline in the CRE benchmark gas price and

further easing in fuel prices. We look for processed food inflation to decline to

-0.1%yoy and unprocessed food inflation to tick up to 4.3%.

n We expect Italian headline inflation to stay at a strong 3.2%yoy in June, and core

inflation to move down to 1.9%yoy, with weaker core goods inflation on a

year-on-year basis and broadly unchanged services inflation. We see

accommodation services printing at 3.4%mom nsa, package holidays coming in at

2.2%mom nsa, and airfares at 11.8%mom nsa. We expect both garments and

footwear to print close to their June 2025 values. Of the non-core components, we

look for energy inflation to increase to 13%yoy from 12%yoy in May, with little relief