Pricking the balloon on Eurozone deflation

18 May 2016

As growth rates in the Eurozone gather steam, policymakers’ concerns are increasingly shifting to low inflation. According to Eurostat, consumer prices in the Eurozone have declined by 0.2% in the past year. Much of the drop is due to sharply lower energy prices, but even when those are stripped out annual price growth stood at 0.7% as of April, significantly less than the ECB’s “close to, but below” 2% target.

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