Deflation is a new phenomenon that the European Union’s economy is currently facing. It is the opposite of inflation and consists of a fall in the general index of prices over a period of time.
In this context, we note that according to Eurostat the annual inflation rate in the Euro Area stood at -0.3 per cent in February, in contrast to -0.6 per cent in January. In the European Union the annual inflation rate stood at -0.2 per cent in February, in contrast to 0.5 per cent in January. The countries with the highest annual inflation rate were Sweden (0.7 per cent), Malta (0.6 per cent), Austria (0.5 per cent) and Romania (0.4 per cent).
Romania is among the only 5 EU member states that registered positive annual inflation rates in February 2015, while 20 other EU states registered negative annual inflation rates, the data published on Tuesday by the European Statistics Office (Eurostat) shows.
Compared to January 2015, the inflation rate dropped in six member states, including Romania (from 0.5 to 0.4 per cent), remained stable in four member states and grew in 17 member states. The countries with the lowest annual inflation rates were Greece (-1.9 per cent), Bulgaria (-1.7 per cent) and Lithuania (-1.5 per cent).
According to the data presented by the National Statistics Institute (INS), the annual inflation rate reached 0.4 per cent in February, a new historic low, being slightly below the level registered in January 2015 (0.41 per cent). Compared to the same month last year, in February 2015 the prices that registered the most significant hikes were the prices of services (+1.53 per cent) and the prices of non-food merchandise (+0.65 per cent), while the prices of foodstuffs dropped by 0.47 per cent.
The monthly price hike stood on average at 0.33 per cent in February compared to January, however in the services category prices rose by 0.2 per cent. Foodstuffs registered the highest month-on-month price hikes (+0.53 per cent), while non-food merchandise registered a price hike of 0.39 per cent.