In April, the euro zone out of correctness of deflation – L’Express

This is great news for the European Central Bank, the quantitative easing policy seems finally bear fruit. Inflation was zero in April (0.0%) in the monetary union, according to a first estimate of the European office of Eurostat statistics. She had gone into negative territory in December to -0.2%, and had not left since. The price drop was even increased in January (-0.6%) before returning to 0.3% in February and -0.1% in March.

A “first success” for the ECB

To counter the risk of deflation, marked by a sustained fall in prices and wages that weighs on the recovery economic, the ECB began in early March a comprehensive program that provides for the acquisition of more than 1,000 billion euros of public and private debt securities by September 2016. In a report released Thursday, the Frankfurt institution emphasizes satisfaction that “inflation expectations in the long term eurozone occasions”, and believes that this can be considered a first success of his action.

The medium-term objective of the Central Bank is to maintain inflation close to, but below 2%.

unemployment weighs heavily on prices

“We are still far away,” said Christian Schulz, an economist at Berenberg, for whom stability in prices in April “does not yet constitute a sign of easing of deflationary pressures. The unemployment rate in the euro zone is in effect unchanged in March, at 11.3%.” At this rate it would take 14 years to return to . level before the crisis “

But unemployment and inflation are closely related: high unemployment encourages employers to maintain pressure on wages and, more generally, is synonymous with limited purchasing power for .. It households which in turn weighs on consumption and prices

Underlying inflation does not take off

Another sign bleak: underlying inflation, which does not take into account the most volatile prices such as energy and food, is “stable at the low 0.6%.” The services sector in particular, with inflation at 0.9%, reached a “historic low” notes the analyst.

“In summary, it is a relief that the deflationary episode was shorter than was feared. But she could return if oil prices and raw materials leave downward, “he concludes.