Eurozone inflation unchanged at 0.2 percent in December: Eurostat
BRUSSELS: Eurozone inflation remained unchanged at a lower than expected 0.2 percent in December, official data said on Tuesday, adding pressure on the European Central Bank to ramp up its efforts to boost the economy in Europe.
The data from the EU’s Eurostat statistics agency came in below analysts’ forecast of 0.3 percent inflation for the period, which is itself much lower than the ECB’s official two percent target.
ECB president Mario Draghi last month disappointed market hopes with a more limited than expected bid to revive the struggling eurozone economy given low inflation levels across the 19 countries that share the euro.
But ECB executive board member Yves Mersch last week said policymakers have “by no means used up all our ammunition”, in an interview with the International Bankers Forum.
Inflation in December was again dragged down by energy prices, led by oil, but this drop slowed sharply to 5.9 percent annually instead of 7.3 percent the previous month, the data showed.
Central bankers of the 19-member eurozone are eager to fight falling prices because they can be poisonous for the economy, creating a vicious circle of falling demand and fewer jobs.
While falling prices might appear to be good for consumers, deflation can last if consumers delay purchases in the hope of lower prices later, which in turn prompts companies to hold off investment.