Fresh data from southern Europe signals a notable easing in producer-level inflation, as both Greece and Italy reported significant decelerations in their Producer Price Index (PPI) for June 2024. Greece's PPI rose 8.8% year-on-year, down sharply from the 13.5% recorded in May, while Italy's index climbed 5.8%, cooling from 7.3% in the prior month. The figures, released by national statistics offices, add to growing evidence that the eurozone's inflationary pressures are receding from their peaks.
The cooling was largely driven by falling global energy costs and stabilizing supply chains, which have reduced input costs for manufacturers and exporters across both economies. In Greece, the 4.7 percentage point drop from May was the most pronounced deceleration in months, while Italy's 1.5 point decline extended a trend that mirrors similar disinflation seen in Germany and France.
For the European Central Bank, the data strengthens the case that inflation is trending downward, though policymakers are likely to remain cautious given sticky core inflation and wage dynamics. Markets interpreted the reports as supportive of a potentially more dovish monetary policy path, which could benefit risk assets such as equities and cryptocurrencies.
