Back
2 Mar 2015
Eurozone inflation to jump in positive territory by H2 2015 - ING
FXStreet (Barcelona) - Peter Vanden Houte of ING, reviews the Eurozone inflation and employment data releases and explains that the improving indicators and acceleration money growth indicates that the deflation is gradually fading.
Key Quotes
“With oil prices creeping higher again and the euro exchange rate still in weakening mode, imported deflation will gradually peter out and the inflation rate should be back in positive territory by the second half of this year.”
“One can imagine a big “I told you so” from the hawks within the Governing Council, who have been arguing that the negative inflation figures on the back of falling oil prices are only a transitory phenomenon.”
“With sentiment indicators improving and money growth accelerating, the risk of deflation is gradually fading.”
“However, the Eurozone economy has now been trapped in a stop-and-go recovery for years and it would be unwise to give the all-clear sign too soon. Indeed, the unemployment rate, also published today, still stood at 11.2% in January. This was a slight decline from December 2014 (11.3%), but still about 4 percentage points higher than the level seen at the outset of the crisis in 2008.”
Key Quotes
“With oil prices creeping higher again and the euro exchange rate still in weakening mode, imported deflation will gradually peter out and the inflation rate should be back in positive territory by the second half of this year.”
“One can imagine a big “I told you so” from the hawks within the Governing Council, who have been arguing that the negative inflation figures on the back of falling oil prices are only a transitory phenomenon.”
“With sentiment indicators improving and money growth accelerating, the risk of deflation is gradually fading.”
“However, the Eurozone economy has now been trapped in a stop-and-go recovery for years and it would be unwise to give the all-clear sign too soon. Indeed, the unemployment rate, also published today, still stood at 11.2% in January. This was a slight decline from December 2014 (11.3%), but still about 4 percentage points higher than the level seen at the outset of the crisis in 2008.”