EU Economy
Eurozone deflation risks receded in February
By Michael Hennigan, Finfacts founder and editor
Mar 2, 2015 - 2:13 PM

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Eurozone deflation risks receded in February as consumer prices moved closer to positive territory.

However, the rise in consumer prices remains far from the definition of price stability by the European Central Bank — below but close to 2%.

Reuters says that in Germany, Europe's largest economy, consumer prices harmonized to compare with other European countries fell for a second consecutive month. But at -0.1%, the drop was not as marked as last month when prices fell by 0.5%, preliminary data from Destatis, the federal statistics office showed. In Spain, EU-harmonized consumer prices fell by 1.2% year-on-year in February after dropping by 1.5% last month. In Italy the year-on-year rate turned slightly positive after two months of deflation.

Eurozone annual inflation is expected to be -0.3% in February 2015, up from -0.6% in January, according to a flash estimate from Eurostat, the statistics office of the European Union.

Looking at the main components of Eurozone inflation, services is expected to have the highest annual rate in February (1.1%, compared with 1.0% in January), followed by food, alcohol & tobacco (0.5%, compared with -0.1% in January), non-energy industrial goods (-0.2%, compared with -0.1% in January) and energy (-7.9%, compared with -9.3% in January).

The Eurozone consists of Belgium, Germany, Estonia, Ireland, Greece, Spain, France, Italy, Cyprus, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Austria, Portugal, Slovenia, Slovakia and Finland.

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