BRUSSELS, March 31, (APP/AFP) – Eurozone
consumer prices continued to fall in March at only a slightly slower pace than in February, data showed Thursday, despite the European Central Bank boosting its already massive stimulus programme to beat deflation.
Economists fear falling prices because if consumers delay purchases to buy cheaper at a later date, it undercuts demand, then investment and jobs in a vicious circle.
The Eurostat statistics agency said the inflation rate in March was a
negative 0.1 percent, compared with minus 0.2 percent in February while in
January, prices rose 0.3 percent.
Falling energy prices again were the major factor, down 8.7 percent in March after a fall of 8.1 percent in February.
Earlier this month, the ECB added to its already unprecedented stimulus programme by slashing record-low interest rates and promising to pump even more money into the banking system in an effort to get the banks to lend freely again.
Analysts had expected inflation to come in at a negative 0.1 percent but were still disappointed at the “very weak” outcome in March.
Jonathan Loynes at Capital Economics said the “figures confirm that price pressures in the single currency union remain very weak.”