Eurozone inflation down again
October 16, 2014
The inflation rate in the euro area dropped to a meager 0.3 percent in September, the European statistics agency, Eurostat, said Thursday in another estimate confirming an earlier forecast.
The 0.1-percent fall from the level reached in the previous month marked the lowest reading in almost five years.
A look at individual member countries revealed that consumer prices even fell in Greece, Spain, Italy, Slovenia and Slovakia, prompting economists to speak of a mini-deflation.
No improvement in sight
The protracted lowering of the eurozone's inflation rate has been seen by analysts as a warning signal that companies may hold off on investments in the hope of having to spend even less on machinery and equipment in the future.
Eurostat attributed the low inflation rate mainly to a drastic fall in energy prices, by far offsetting higher prices for food items, alcohol and tobacco.
In a bid to boost eurozone economies, the European Central Bank had already lowered its benchmark financing rate to 0.05 percent and is planning to buy up asset-backed securities (securities backed by a loan, lease or receivables) in a controversial move to spur bank lending.
The ECB maintains long-term price stability is best served with an inflation rate of slightly below 2 percent.
hg/sgb (AFP, Reuters, dpa)