Inflation in the 16-member eurozone went further into negative territory in July in the wake of this year's worldwide economic slowdown. Unemployment in the bloc also took a turn for the worst. Preliminary figures from the European Commission's statistics office, Eurostat, showed consumer prices fell more than forecast from minus 0.1 per cent in June to minus 0.6 per cent this month. Economists had forecast a drop to minus 0.4 per cent in July. Weaker energy and food prices are believed to be central to the overall predicted drop. But dwindling consumer prices have also helped to stoke fears about the threat of deflation, which in turn could undercut hopes of an early rebound in the eurozone economy from what has been its deepest downturn in more than 60 years. The eurozone economy shrank by 4.8 percent year-on-year during the first three months of 2009. However, European Central Bank (ECB) chief Jean-Claude Trichet has insisted that the negative inflation in the eurozone was likely to be short-lived. Trichet told a press conference this month that the latest consumer price data reflected only temporary effects.
Preliminary figures from the European Commission's statistics office, Eurostat, showed consumer prices fell more than forecast from minus 0.1 per cent in June to minus 0.6 per cent this month. Economists had forecast a drop to minus 0.4 per cent in July.
Weaker energy and food prices are believed to be central to the overall predicted drop.
But dwindling consumer prices have also helped to stoke fears about the threat of deflation, which in turn could undercut hopes of an early rebound in the eurozone economy from what has been its deepest downturn in more than 60 years.
The eurozone economy shrank by 4.8 percent year-on-year during the first three months of 2009.
However, European Central Bank (ECB) chief Jean-Claude Trichet has insisted that the negative inflation in the eurozone was likely to be short-lived. Trichet told a press conference this month that the latest consumer price data reflected only temporary effects.
...pray tell what is deflating besides the quality of reporting.
Several communities have made wifi free, which has driven me out of business...but I guess that is deflation...one restaurant that I went to in the last few weeks has lowered to price to accommodate the tax decrease from 19.6 to 5%, while another resto did not...phone bills are not going down...
Where is this deflation stuff that I can be taking advantage of??? perhaps they are speaking of the interest rate offered on investment money (3.5% for 10 years), which is absurdly low... Never underestimate their intelligence, always underestimate their knowledge.
Frank Delaney ~ Ireland
