Euro Area Energy Import Bill Jumps 32.4 Percent as Inflation Is Confirmed at 3.8 Percent

By The Edge Research Team

Euro area inflation was confirmed at 3.8 percent in September, up from 3.2 percent in August, with energy prices 18.9 percent higher than a year earlier, Eurostat said on 16 October. The same energy shock showed up at the border. The euro area’s energy import bill rose 32.4 percent from a year earlier to 41.8 billion euros in August, and its energy deficit widened to 26.7 billion euros from 21.3 billion a year earlier. The overall goods balance with the rest of the world, not seasonally adjusted, swung to a 16.1 billion euro deficit from a 10.7 billion surplus in July.

Energy accounts for more than the whole rise over the year

A year ago, in September 2025, energy subtracted 0.03 points from a 2.2 percent inflation rate. This September it added 1.71 points. That swing of 1.74 points is larger than the 1.6 point rise in the headline rate itself, on our calculation, so the rest of the basket now contributes less than it did a year ago. Food, alcohol and tobacco did most of the offsetting, its contribution falling to 0.25 points from 0.58. Services added 1.52 points against 1.49, and non-energy industrial goods 0.29 against 0.19.

The measure that strips out energy alone tells the same story: it stood at 2.3 percent in September, below the 2.5 percent of September 2025. Core inflation, which also excludes food, alcohol and tobacco, was 2.5 percent, against 2.4 percent in August and a year earlier. Since January it has moved inside a 2.2 to 2.6 percent band while the headline rate has more than doubled from 1.7 percent, on our reading.

The month told a similar story. Energy’s contribution rose 0.42 points between August and September, services added 0.09, food 0.03, and non-energy goods gave back 0.01. Summed, the four contributions rose 0.53 points, against 0.6 points for the headline rate, which is published to one decimal, on our calculation. Energy prices rose 4.0 percent in September alone, against 0.6 percent for the whole basket, and the 18.9 percent annual rate matches January 2023, the highest since December 2022, on our reading.

Contributions to euro area annual inflation, percentage points

Contributions add to the annual rate allowing for rounding. Energy carries a weight of 90.3 per 1,000 in the 2026 basket.

The same shock at the border

On the trade side the energy shock is a bill paid abroad. Euro area energy imports from outside the bloc were worth 41.8 billion euros in August, up 32.4 percent from 31.6 billion a year earlier. Energy exports grew faster in percentage terms, 47.3 percent on our calculation, but from a base of 10.3 billion euros, so they reached only 15.1 billion. Energy made up 17.2 percent of all imports from outside the euro area, against 15.1 percent a year earlier, and the 10.2 billion euro rise in energy imports was 29.4 percent of the 34.9 billion euro rise in total imports, on our calculation.

In July, the latest month with unit value data, price did more of the work than volume: euro area energy import unit values were 22.8 percent above a year earlier while import volumes rose 6.1 percent. In May the gap was wider still: unit values up 51.6 percent, volumes up 10.4 percent. This year the monthly energy deficit was widest in May, at 30.9 billion euros, and has since run between 24.7 billion and 26.7 billion.

Over January to August the energy deficit came to 201.0 billion euros, 13.5 billion or 7.2 percent more than in the same months of 2025, on our calculation from the monthly database. That is still only 51.6 percent of the 389.7 billion euro energy deficit of January to August 2022, on our calculation.

Euro area goods trade with the rest of the world, August, billion euros

Not seasonally adjusted. Energy is mineral fuels, lubricants and related materials. The export change, the surplus excluding energy and the changes in the last three lines, in billion euros, are our calculation.

A 16.1 billion euro deficit, the widest since January 2023

Exports rose 9.9 percent to 227.7 billion euros in August while imports rose 16.7 percent to 243.8 billion. The resulting 16.1 billion euro deficit compares with a 1.7 billion deficit a year earlier, and it is the widest monthly gap on the unadjusted series since January 2023, when it reached 35.2 billion, on our reading of the database. Energy accounts for 5.4 billion, or 37.4 percent, of the 14.4 billion euro swing from August 2025, on our calculation. The statistics office put the larger part down to machinery and vehicles, whose balance turned from a 7.2 billion euro surplus into a 0.7 billion deficit, a 7.9 billion turn.

Seasonally adjusted, exports fell 1.2 percent from July and imports rose 2.0 percent, taking the adjusted balance to a 6.8 billion euro deficit from a 1.4 billion surplus. July’s unadjusted balance was itself revised: the first estimate of 15 September showed a 14.2 billion euro surplus, and the figure now stands at 10.7 billion. Imports were revised up by 3.0 billion euros to 264.8 billion and exports down by 0.5 billion to 275.5 billion, on our calculation.

For January to August the euro area ran a 5.4 billion euro deficit, against a 90.9 billion surplus a year earlier, as exports grew 2.1 percent and imports 7.3 percent. The wider European Union recorded a 25.2 billion euro deficit in August. Its energy imports rose 31.2 percent to 44.9 billion euros, 19.7 percent of all its imports on our calculation, and its energy deficit widened to 31.4 billion from 24.3 billion. EU imports from Norway, across all goods, rose 38.6 percent to 10.2 billion euros.

Where the rise was sharpest, and the gap to the 2 percent target

Annual inflation rose in 23 member states, was stable in three and fell in one. Romania had the highest rate at 6.5 percent, though that is 2.1 points below its rate a year earlier, and Sweden the lowest at 1.0 percent, a spread of 5.5 points. The sharpest monthly step-up came in Estonia, where the rate jumped 1.8 points to 3.1 percent, on our reading. Greece’s rate rose 1.4 points to 5.1 percent and Luxembourg’s 1.2 points to 5.2 percent. Among the four largest economies Italy moved most, by 1.0 point to 4.2 percent.

Annual inflation, selected countries, harmonised rates

Romania and Sweden are outside the euro area and had the highest and lowest rates in the European Union.

The European Central Bank raised its three key rates by 25 basis points on 10 September, taking the deposit rate to 2.50 percent from 16 September, and said inflation is “set to remain well above target for an extended period”. Its staff baseline puts headline inflation at 3.0 percent in 2026 and inflation excluding energy and food at 2.5 percent. Both are projections for the year as a whole, not monthly readings. In September the headline rate stood 1.8 points above the 2 percent target and core 0.5 points above it, on our calculation, and the headline rate has been at or above 2.8 percent every month since April.

Why it matters: The euro area is paying for the energy shock twice, once at the pump and the meter, where energy prices are 18.9 percent higher, and once at the border, where a month’s energy imports cost 10.2 billion euros more than a year ago. The inflation is narrow: excluding energy it is lower than a year ago, and core has stayed inside a 2.2 to 2.6 percent band since January. The trade deterioration is broader: the 7.9 billion euro turn in machinery and vehicles was larger than the 5.4 billion widening of the energy deficit. That combination, an imported price shock on top of a goods balance that has moved into deficit, is what the Governing Council has to weigh, and its staff scenarios address indirect and second-round effects.

Outlook: The Governing Council meets on 28 and 29 October, with its decision on 29 October, before the October flash estimate of 4 November, so September’s 3.8 percent will be the latest full reading on the table. The full October inflation data follow on 18 November. September trade figures are due on 13 November.

Sources: Eurostat, European Central Bank, The Edge.

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