BRUSSELS, June 30 (Xinhua) -- The inflation across 19-country eurozone fell to the lowest rate this June due to waning effect of energy price hiking, but core inflation picked up, official data showed Friday.
The inflation in the single currency zone stood at 1.3 percent, down from the 1.4 percent in May, said the European Union (EU)'s statistics agency Eurostat. Core inflation, excluding volatile elements such as energy and food, was 1.1 percent, higher than the 0.9 percent in previous month.
The improved core inflation reading could be welcoming to the bloc's policy makers who struggle to shore up economic growth and achieve an inflation goal of just below 2 percent.
The consumer prices in the eurozone have gained some momentum since the end of last year and once reached 2 percent in February thanks to energy price hiking, with core inflation, followed closely by the European Central Bank (ECB), remained subdued at around 1 percent.
Other business data have added the evidence that the Eurozone is experiencing better-than-expected recovery. The Composite Purchasing Managers' Index (PMI) of the eurozone was 55.7 in June while the average PMI reading for the second quarter -- 56.4 --marked the highest since the first quarter of 2011.
Eurozone businesses and consumers were more optimistic in June than at any time since before the global financial crisis as the European Commission's Economic Sentiment Indicator, which aggregates business and consumer confidence, jumped from 109.2 in May to 111.1, its highest level since August 2007.
The gross domestic product (GDP) in the Eurozone expanded by 0.6 percent quarter on quarter between January and March, official data showed earlier this month, making the yearly GDP growth accelerate at 1.9 percent. Both the Commission, the EU's executive arm, and the ECB have revised up their projects for future growth.
In the meantime , the jobless rate in the bloc, which once hit double-digit, steadily fell in recent months, fueled the optimism of Europe's recovery among policy makers.
Calls have emerged for the ECB to ease its massive stimulus measures. Currently, the Bank currently runs its interest rates to record low and buys 60 billion euros in bonds per month at least till the end of this year, to promote lending in banks.
However, economists predicted the ECB, whose priority is to drive inflation to "close to 2 percent," would stay cautious despite that core inflation is expected to increase in the months to come.
The ECB President Mario Draghi Draghi has stressed that the bank will wait for core inflation to be on a clear upward path throughout the eurozone before raising interest rates, said Jennifer McKeown, Chief European economist at the Capital Economics.
While QE (quantitative easing) tapering is likely to go ahead next year, the ECB will keep saying that the pace of normalisation will be slow and that interest rate hikes are a long way off, said Mckeown.
