What has kept goods inflation low? The role of the import exposure to China

Pablo Anaya Longaric, Claudia Esposito, Vanessa Gunnella, Noémie Lecourt, Catalina Martínez Hernández and Giacomo Pongetti

Economic Bulletin Boxes, 2026, vol. 4

Abstract: This box analyses the impact of prices of imports from China on euro area goods inflation. Inflation for China-exposed goods has been persistently lower than total goods inflation, with model-based estimates suggesting that shocks which bring down the prices of imports from China by 10% in exposed sectors reduce inflation by 0.1-0.7 percentage points in key categories such as furniture and appliances. A historical decomposition estimated over the period between January 2002 and April 2026 shows that, cumulatively, import price shocks from China reduced goods inflation by 0.27 percentage points by April 2026, with delayed effects from the appreciation of the euro in 2025 further dampening goods inflation. JEL Classification: E31, C32, F14

Keywords: euro area goods inflation; exchange rate; import price shocks from China (search for similar items in EconPapers)
Date: 2026-06
Note: 2700331
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.ecb.europa.eu//press/economic-bulletin ... 6~f469938e52.en.html (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ecb:ecbbox:2026:0004:6

Access Statistics for this article

More articles in Economic Bulletin Boxes from European Central Bank 60640 Frankfurt am Main, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Official Publications ().