News

The End of Deflation in the Eurozone?

The economy has been so weak in the Eurozone that observers now celebrate even a 0% inflation rate (April).

The financial media has announced the end of deflation. Read these headlines (all from April 30):

  • Eurozone's dip into deflation halted as prices remain flat -- (Financial Times)
  • Eurozone exits deflation in April -- (BBC)
  • The eurozone's deflation has been halted -- (Business Insider)
  • Eurozone edges out of deflation -- (The Guardian)

Here's an excerpt from an April 30 CNBC article titled, "Euro zone deflation ends; prices flat in April":

The euro zone ended four months of deflation in April, with official data on [April 30] showing that prices were unchanged from a year ago.

The euro zone's inflation rate was flat in April from the year before, in line with market expectations, following a 0.1 percent fall in March, the European Union's statistics offices said in an estimate.

Signs that deflation risks in the 19-member euro zone are abating come against a backdrop of massive monetary stimulus from the European Central Bank to boost economic growth and ease worries about falling prices.

"Our view has been that economic activity would pick up this year and with the impact of QE (quantitative easing), deflationary expectations would moderate," Goldman Sachs Chief Global Equities Strategist, Peter Oppenheimer, told CNBC following the release of the inflation data.

You can read the entire article by following the link below:

http://www.cnbc.com/id/102634521