Inflation

Falling prices in the Euro area

Good for the consumer – a cause for concern for the European Central Bank: consumer prices fell again. Due to the prices, especially the low energy.

Consumer prices in the Euro area fell for the first time in half a year. The primary reason for this sharp fall in energy prices. As the statistics Agency Eurostat announced on Monday in a preliminary estimate, the cost of living in the 19 countries of the monetary Union in February, by 0.2 percent compared to the previous month. Reason, lower energy costs, which fell by eight per cent, were strong. The 0.5 points less than in January.

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In February services (1.0 percent), food, alcohol and tobacco (0.7 percent) and industrial goods (0.3 percent) rose in price in the Luxembourg statisticians, though; but the sharply falling energy prices offset these increases completely.

Concern of the ECB

The negative price development surprised analysts, who had expected that February is largely a Zero-Inflation. For Germany, the Federal Statistical office had reported on Friday, an inflation rate of 0 percent.

The European Central Bank (ECB) looks with concern on the tumbling prices, and considers a rate of inflation of just under two percent is considered optimal for the economy. For months, the ECB is trying to bring Inflation back towards its target value. To do this, has launched a programme for the purchase of bonds on a monthly basis, approximately 60 billion euros.

ECB chief Mario Draghi had said in mid-February, the Central Bank will not hesitate to ease monetary policy further, if necessary. Your on 1.5 trillion euros-scale purchase program for bonds and other securities to be running until the end of March 2017. In order for the economy to be stimulated and also the level of Inflation. The next meeting of the Central Bank Council takes place on 10. The end of March.

iw/ (dpa, afp)