The annual inflation rate has dropped from 0.2 per cent in July to 0.1 per cent in August in the Euro Area, and from 0.2 to 0 per cent in the European Union, the data published on Wednesday by the European Statistics Office (Eurostat) shows.
In August, the countries with the highest annual inflation rate were Malta (1.4 per cent), Austria (0.9 per cent) and Belgium (0.8 per cent). On the other hand, 11 EU member states registered negative annual inflation rates in August, headed by Cyprus (-1.9 per cent), Romania (-1.7 per cent) and Lithuania (-1 per cent).
Compared to July, the inflation rate dropped in 14 member states, rose in 10 member states and remained unchanged in 4 member states.
In March the European Central Bank started its much-expected quantitative easing programme worth EUR 1,100 bln, meant to boost the Euro Area economy and to avoid the risk of a deflationary spiral.
ECB President Mario Draghi announced combined monthly purchases of Euro Area sovereign bonds and corporate bonds of up to EUR 60 bln from March 2015 to September 2016.
According to ECB estimates, the inflation rate will stand at 0.7 per cent this year and at 1.3 per cent next year – far below the institution’s 2 per cent target. And these projections could be revised downwards too because they do not fully reflect the recent drops in the price of oil.
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