16.01.2015 - Deflation in the euro area was 0.2%

Inflation in the euro area turned negative for the first time since 2009. The consumer price index in the euro zone fell by 0.2% in December, in line with analysts' expectations. Last drop of 0.3% was observed in September 2009. It is worth mentioning that inflation in November was 0.3%. The reason for the rapid decrease in the index was the drop in fuel prices due to the collapse of oil prices. Deflation is a major stimulus to launch a full-scale program of quantitative easing after the ECB meeting on January 22. In this regard, we expect a further fall in prices with the objectives at 1.15 and 1.10.

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