Despite the fact that economic conditions picked up, price pressures in the euro area remained sluggish. While higher oil prices and the robust upswing did cause inflation to grow much more briskly in 2017 than it had one year earlier, headline inflation slipped again slightly at the start of 2018.
The subdued domestic price pressures reflect the fact that some countries are still trying to boost their price competitiveness by keeping wages down. But domestic price pressures are subdued even in countries that weren’t at the epicentre of the crisis.