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Eurozone Inflation Rate Sags to 0.1%
Inflation in the Eurozone grew only 0.1% in August, down from an initial estimate of 0.2%, according to Eurostat.
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Inflation in the Eurozone grew only 0.1% in August, down from an initial estimate of 0.2%, according to Eurostat.
The decline in consumer prices was caused mainly by falling energy costs. But it raises new concerns that Europe could slip into a period of dangerous deflation. Analysts predict the European Central Bank, which considers a 2% growth rate healthy, may add new economic stimulus measures.
The risk is high that Europe, which last reported shrinking prices in March, will do so again over the next several months, economists warn. They says prolonged deflation could lead to years of economic stagnation as consumers delay purchases because they expect lower prices in the future.
The ECB already is injecting €60 billion into the eurozone's economy every month by buying corporate and government bonds. The program is intended to promote spending, but it also weakens the value of the euro against other currencies. The central bank's bond-buying scheme currently is scheduled to continue for another 12 months.
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