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Eurozone inflation inflation falls to 0.9 percent in September

Friday, 4 October, 2019 - 12:59

Eurozone inflation reached its lowest level in three years in September at 0.9 percent, down from 1.0 percent in August, according to figures released by the Office on Tuesday European Statistical Office, Eurostat.

This figure is lower than the expectations of analysts surveyed by the financial information provider Factset, who expected 1.0 percent.

It remains well below the target of the European Central Bank (ECB), which aims to maintain a level of inflation slightly below 2 percent.

This is the lowest level of inflation since November 2016 (0.6 percent).

This weakness is explained by the trade war between the United States and China, which has hamstrung the world economy, especially exporting powers like Germany, whose manufacturing industry is entering a recession phase.

Core inflation (excluding energy, food, alcoholic beverages and tobacco, which therefore excludes particularly volatile products) rose to 1.0 percent, compared to 0.9 percent in August.

This increase is due to the fall in energy prices (-1.8 percent) in September.

Low inflation can be a sign of economic weakness and has been a concern for officials at the ECB, whose goal is to have inflation of just under 2 percent The central bank, which sets monetary policy for the euro countries, decided on Sept. 12 to launch a package of measures aimed at raising inflation and supporting weakening growth.

The measures include cutting a key interest rate benchmark to minus 0.5 percent from minus 0.4 percent and starting to buy 20 billion euros a month in government and corporate bonds, a move that pumps newly created money into the economy. The steps aim to make credit cheaper for businesses and stimulate economic activity while raising inflation.


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