The Contribution of Administered Prices and Indirect Taxation to Inflation in the Euro Area: Recent Results

The contribution shows the influence of administered prices and indirect inflation on current price developments. There has been pronounced disinflation in the euro area for some time, while the harmonised consumer price index is actually below the previous year’s level. This development was mainly due to the falling price of oil, cheap food prices, as well as a negative output gap. The pricing pressure in the euro area from administrated price increases and higher indirect taxes fell significantly. In the second half of 2014 the increase in administered prices contributed 0.2 percentage points to overall inflation in the euro area and the influence of indirect taxation on the consumer price level ultimately fell.