Eurozone inflation falls to 0.2 percent in June

As energy costs weaken and food prices fall, consumer price index (CPI) in eurozone declines in June compared with a month ago

Photo by: Reuters
Photo by: Reuters

Updated Jul 28, 2015

Inflation in the 19-nation eurozone slowed slightly in June after expanding in May. According to the European Union’s statistics office Eurostat, consumer prices in the eurozone rose by 0.2 percent year-on-year in June, while inflation recorded a 0.3 percent increase in May. 

Core inflation, which excludes energy and unprocessed food prices, rose 0.8 percent in June compared to 0.9 percent in May. 

The European Central Bank (ECB) aims to keep inflation below but close to 2 percent over the medium term. In order to achieve this, the ECB began a quantitative easing programme in March to stimulate the economy and avert the risk of deflation. Under this money-printing programme, the bank is buying government bonds and other assets to pump around €1 trillion into the economy, while the programme is expected to last until September 2016. 

The inflation slowdown in Germany is considered to be a major reason for the weaker-than-expected inflation in the eurozone as a whole. Europe’s largest economy, Germany posted slower than expected inflation data on Monday with an increase of only 0.1 percent, below market expectation of a 0.4 percent increase. Germany’s inflation rose 0.7 percent in May.

In a separate report, unemployment figures have been announced and the eurozone average remains unchanged at 11.1 percent in May, suggesting that wage growth has been flat. 

TRTWorld and agencies