Eu­ro­zone In­fla­tion Static, Long Way from ECB’s 2% Tar­get

Eu­ro­zone has been flirt­ing with price de­fla­tion for the past year mainly due to low oil rates, consumer prices grew just 1% yoy

The Economic Times - - Commodities Plus -

Will Martin

Lon­don: Eu­ro­zone in­fla­tion es­caped from neg­a­tive ter­ri­tory in March, with prices nei­ther grow­ing nor fall­ing over the course of the month, ac­cord­ing to the lat­est re­lease from Euro­stat. In­fla­tion was flat at 0%. That num­ber means that prices are no longer fall­ing, but aren’t grow­ing ei­ther, and are a very long way from the Euro­pean Cen­tral Bank’s 2% tar­get. On a month-to-month ba­sis, prices were up 1.2% in the Euro area, while year-on-year core consumer prices grew by 1%.

Core prices are an im­por­tant mea­sure be­cause they strip out the most volatile items like fuel and food prices which are sub­ject to mas­sive variations. The eu­ro­zone has been flirt­ing with price de­fla­tion for the past year or so, largely hover­ing just above zero since early 2015.

A large part of the eu­ro­zone’s ex­tremely low in­fla­tion right now is down to the slump in the price of oil over the last year — but the core fig­ure shows that other prices aren’t ris­ing by as much as the ECB would like, ei­ther. — Busi­ness In­sider

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