Eurozone inflation rate drops slightly to 2.5 percent

July 29th, 2011 - 10:27 pm ICT by BNO News  

BRUSSELS (BNO NEWS) — The European Union (EU) on Friday announced that the eurozone’s annual inflation is expected to be 2.5 percent in July, slightly lower than the prior month.

The flash estimate was issued by the EU statistical office, Eurostat, which measures the euro area’s inflation rate with the Monetary Union Index of Consumer Prices and available monthly data from each Member State. In June, the region registered a 2.7 percent inflation rate.

Eurostat also reported on Friday that in the first quarter of the year, compared with the fourth quarter of 2010, business investment rates were still at low levels in both the 17-nation Eurozone and the 27-nation European Union.

The gross investment rate of non-financial corporations was 19.9 percent in the EU-27, compared with 20.1 percent in the fourth quarter of 2010. In the euro area, the investment rate was 20.7 percent compared with 20.6 percent in the previous quarter.

According to the report, investment grew by 1.9 percent in nominal terms and value added by 1.2 percent. Stocks of materials, supplies and finished goods increased noticeably as well.

Gross profit share in the 27-nation region of non-financial corporations was 38 percent in the first quarter of the year, almost unchanged compared with the previous quarter (38.1 percent).

Meanwhile, in the euro area, the profit share was 38.5 percent, showing a slight increase compared with 38.3 percent in the fourth quarter of 2010. This increase was due to value added increasing faster (+1.2 percent) than compensation of employees (wages and social contributions) plus taxes less subsidies on production (+0.9 percent).

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