21st Mar 2018

Eurozone edges out of deflation

  • Prices were flat in April, ending four months of deflation across the eurozone (Photo: Jan Willem van Wessel)

The eurozone edged out of a four-month period of deflation in April, according to the EU’s statistical agency.

An estimate by Eurostat released on Thursday (30 April) found that consumer prices were flat in April 2015, up from -0.1% in March. Prices had fallen for four consecutive months since December.

Thank you for reading EUobserver!

Subscribe now for a 30 day free trial.

  1. €150 per year
  2. or €15 per month
  3. Cancel anytime

EUobserver is an independent, not-for-profit news organization that publishes daily news reports, analysis, and investigations from Brussels and the EU member states. We are an indispensable news source for anyone who wants to know what is going on in the EU.

We are mainly funded by advertising and subscription revenues. As advertising revenues are falling fast, we depend on subscription revenues to support our journalism.

For group, corporate or student subscriptions, please contact us. See also our full Terms of Use.

If you already have an account click here to login.

Although energy prices continue to be the main drag on prices, following a further 5.8 percent in April, on the back of the continued low oil price, services and food were both up - services by 0.9 percent.

Although the rebound in prices is far from complete, the deflationary spiral appears to have ended ahead of expectations.

In the European Commission’s Winter Economic forecasts, published in February, Economics commissioner Pierre Moscovici predicted that prices would not start to increase until the second half of 2015.

A number of policy-makers had expressed fears that extremely low inflation in the eurozone could result in the kind of falling prices that have dogged Japan’s economy for two decades.

The news also serves as early vindication for the European Central Bank, whose €1.1 trillion bond-buying programme was intended, in part, to boost prices.

At the announcement of the programme in January, ECB president Mario Draghi said that it would remain in place “until we see a sustained adjustment in the path of inflation which is consistent with our aim of achieving inflation rates below, but close to, 2%”.

In its monthly economic bulletin published on Thursday, the ECB stated that inflation would remain low for several months before gradually increasing.

“The gradual increase should be supported by the favourable impact of the ECB’s monetary policy measures on aggregate demand, the impact of the lower euro exchange rate and the assumption embedded in futures markets of somewhat higher oil prices in the years ahead,” the bank stated.

Meanwhile, household income and spending per capita edged up by 0.1 percent in the fourth quarter of 2014.


Deflation in Europe: curse, ogre or benign?

The eurozone economy has never experienced a protracted period of deflation. That is what is facing it now. The question is whether it matters.


The ECB must act now to prevent deflation

If the ECB continues to sit on its hands over monetary policy and politicians in Brussels continue to believe neo-liberal dogma about self regulating markets and automatic stabilisers, expect things to get far, far worse, fears George Irvin.


EU praises Turkey on migrant deal despite Greek misery

The EU-Turkey deal was agreed two years ago in Brussels. Focus has largely been on reducing migrant flows across the Mediterranean and helping Syrian refugees in Turkey, while the plight of those on the Greek islands are ignored.

News in Brief

  1. Separatist activist renounces Catalonia leadership candidacy
  2. EU puts conditions on Bayer-Monsanto merger
  3. Hard Brexit would hit poorer Irish households hardest
  4. Finland hosts secretive North Korean talks
  5. EU to unveil 3% tax on digital giants
  6. German elected S&D leader in European Parliament
  7. Germany: nearly €350m child benefit goes abroad
  8. Norway's far-right doubles support as minister resigns

Stakeholders' Highlights

  1. EUobserverStart a Career in EU Media. Apply Now to Become Our Next Sales Associate
  2. EUobserverHiring - Finance Officer With Accounting Degree or Experience - Apply Now!
  3. ECR GroupAn Opportunity to Help Shape a Better Future for Europe
  4. Counter BalanceControversial Turkish Azerbaijani Gas Pipeline Gets Major EU Loan
  5. World VisionSyria’s Children ‘At Risk of Never Fully Recovering', New Study Finds
  6. Macedonian Human Rights MovementMeets with US Congress Member to Denounce Anti-Macedonian Name Negotiations
  7. Martens CentreEuropean Defence Union: Time to Aim High?
  8. UNESDAWatch UNESDA’s President Toast Its 60th Anniversary Year
  9. AJC Transatlantic InstituteAJC Condemns MEP Ana Gomes’s Anti-Semitic Remark, Calls for Disciplinary Action
  10. EPSUEU Commissioners Deny 9.8 Million Workers Legal Minimum Standards on Information Rights
  11. ACCAAppropriate Risk Management is Crucial for Effective Strategic Leadership
  12. EPSUWill the Circular Economy be an Economy With no Workers?

Latest News

  1. EU praises Turkey on migrant deal despite Greek misery
  2. Judicial reforms 'restore balance', Poland tells EU
  3. Whistleblower fears for life as US arrests Malta bank chair
  4. Behind the scenes at Monday's EU talks on Russia
  5. US yet to push on Nord Stream 2 sanctions
  6. EU mulls coercion to get refugee kids' fingerprints
  7. Five east European states prevent new CAP consensus
  8. EU to probe UK 'election-rigging' firm