The prices in the euro zone fell 0.3% in February compared to the same month last year, estimates Eurostat. The result is a rise in the face of negative inflation rate of 0.6% recorded in January.
The result of the flash estimate produced by the European statistics office was slightly above what was expected by analysts. A survey conducted by the agency Bloomberg provided that the annual inflation rate in the 19 countries of the euro rise of 0.6% from January to -0.4%.
The climb to -0.3% shows that the impact of fuel price decrease, which felt very strongly in January, declined more significantly than expected in February.
These figures are good news for the European Central Bank (ECB), which begins during this month of March to hold a public debt purchases to try to reduce deflationary pressures they feel currently in the euro area.
Still, despite this rise, the truth is that the annual inflation rate remains in negative territory and analysts guess that the price variation of less volatile products (ie excluding goods such as fuel and food) remains fairly stable at a historic low since the creation of the euro.
“There is no indication that the trend in core inflation has changed. If you remove the volatile elements, mainly oil prices, inflation remains low and the underlying trend is extremely weak, “said Jacques Cailloux, an economist at Nomura bank, the agency Reuters .
There is concern that the continuation of this very low or negative inflation trend may create in businesses and families to permanent expectation of lower prices, leading them to postpone investment and consumption decisions that affect the performance of the economy. In this case, the euro area would in a deflation scenario which is very hard to leave.
To avoid this, the ECB is now launching an asset purchase program, including public debt, which has the aim to combat deflation. Some economists fear, however, that the decision may have been taken too late.
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