The EU released its second positive report in two days on the economic performance of its Eurozone member countries. Figures from its Eurostat statistical agency show growth holding up and inflation headed down. EPA-EFE/PATRICK SEEGER
Feb. 1 (UPI) -- The eurozone's annual inflation rate continued on its downward track last month, the third successive month that the pace at which prices are increasing has slowed, according to European Union figures out Wednesday.
The almost three-quarters of a percentage point decrease to 8.5%, down from 9.2% in December, was the third month in a row that prices in the 20 countries that use the euro and the lowest inflation rate since June, preliminary figures from Eurostat, the EU's statistics office, show.
Inflation in the bloc now appears to have peaked in October, at 10.6%.
Energy, food, alcohol and tobacco prices made the largest contribution to the high inflation report, with prices rising at an annualized rate of 17.2% and 14.1% respectively, but they also contributed strongly to the overall decrease.
Energy inflation was down from 25.5% in December while food, alcohol and tobacco was up from 13.8%.
Inflation varied widely by country across the zone with some Baltic economies being hit by rates of inflation approaching near or above 20% and rising, while other countries saw inflation fall.
Estonia's rate of inflation rose to 18.8% from 17.5% in December while Latvia's rate jumped from 20.7% to 21.6%. But neighboring Lithuania's inflation rate fell to 18.7%, down from 20% in December.
Inflation also rose in Austria, France and Spain, albeit from much lower levels.
At the other end of the spectrum, the Netherlands' inflation rate fell sharply from 11% to 8.4%. Belgium, Ireland, Greece, Italy, Ireland, and Portugal also all saw their inflation rates fall from their December levels.
Inflation in Croatia, which was included for the first time since joining the eurozone on Jan. 1, fell to 12.5% down from 12.7% in December.
The inflation report follows reports released on consecutive days this week from the IMF and the EU, both indicating some cause for optimism.
On Tuesday the EU reported a slight, but unexpected, rise in gross domestic product in the fourth quarter.
The 0.1% GDP rise -- down from 0.3% in the third quarter -- came despite the fact almost a third of Eurozone economies, including, Germany, shrank.
But growth was up 1.9% compared with the fourth quarter of 2021. The figures excluded Croatia.
Growth in the EU as a whole, which comprises 27 countries, flatlined at 0%, down from 0.3% in the third quarter. However, growth was up 1.8% on the fourth quarter of 2021.
The IMF's 2023 World Economic Outlook Update released on Monday said that although inflation and the Ukraine war would see global growth slow this year, it had become less pessimistic about the prospects for the world economy.
"Despite these headwinds, the outlook is less gloomy than in our October forecast, and could represent a turning point, with growth bottoming out and inflation declining,'' Pierre-Olivier Gourinchas, the fund's director of research, said in a blog post.
''Economic growth proved surprisingly resilient in the third quarter of last year, with strong labor markets, robust household consumption and business investment and better-than-expected adaptation to the energy crisis in Europe.''