Bottles of wine are on display at a supermarket in Brussels, Belgium, on May 31, 2024. [Photo/Xinhua]

The eurozone's annual inflation rate for December of last year stood at 2.4 percent, up from November's 2.2 percent, according to a flash estimate released by Eurostat on Tuesday.

The price of services is currently driving the eurozone's inflation, the services sector inflation standing at 4 percent, up from 3.9 percent in November.

It is followed by food, alcohol, and tobacco, with an annual inflation rate of 2.7 percent in December, unchanged from the previous month.

The price of non-energy goods recorded an inflation rate of 0.5 percent year on year, down from November's 0.6 percent.

The inflation rate for energy moved from negative to positive, standing at 0.1 percent in December.

Among eurozone countries, Croatia led with an annual inflation rate of 4.5 percent in December, followed by Belgium at 4.4 percent and Estonia at 4.1 percent.

This marks the third consecutive month of rising inflation in the eurozone. After falling to 1.7 percent in September, inflation has steadily increased, reaching 2.4 percent in December.

"Examining the drivers of the higher inflation rate, it's important to note that the downward impact of energy prices is now petering out," said Peter Vanden Houte, chief economist at ING for the eurozone.

"This upward trend isn't over yet. Natural gas prices are now more than 50% higher than a year ago, and oil prices are no longer falling. As such, energy will be a significant upward risk to inflation in the first quarter," he added.

Vanden Houte also warned of a potential rise in agricultural commodity prices, which could lead to higher food prices, as well as the risk of a trade war, which could impact the price of goods.

Services inflation remains a concern. Both the PMI survey and the European Commission's sentiment indicator suggest that upward price pressures in services remain significant due to still-strong wage increases and higher price-setting by services companies.

Vanden Houte predicted a further increase in the eurozone's inflation during the first quarter of 2025. He expressed skepticism about the European Central Bank's (ECB) forecast of declining inflation, which was based on negative energy inflation, no longer the case in December.

"We still expect the ECB to continue cutting interest rates, but it is unlikely that the pace of loosening will accelerate," said Vanden Houte.