Eurozone inflation falls in September: Eurostat

PanARMENIAN.Net - Inflation in the eurozone fell in September while unemployment in August remained at 11.5 percent, according to official data on Tuesday, Sept 30, that highlighted the region’s economic weakness, The New York Times reports.

Inflation declined to 0.3 percent from 0.4 percent, according to a preliminary estimate by Eurostat, the European Union statistics agency. The figure was in line with analyst expectations but still well below the European Central Bank’s target of just under 2 percent.

The decline continues to worry economists and policy makers that the eurozone economy is in danger of tipping into deflation, where falling prices cause consumers to delay making purchases and can lead to higher unemployment as companies lose revenue and are forced to lay off workers.

Along with high unemployment, which was unchanged from July, the data keep pressure on the central bank to add more stimulus to the eurozone economy. The bank meets Thursday and is expected to give details of plans to buy private-sector assets in order to encourage more bank lending.

But analysts do not expect the central bank to yet heed calls for a broader asset-purchase program that would include government bonds. Such action would provoke an outcry in Germany.

Inflation in the 18 countries of the eurozone was held back by falling prices for energy and other commodities, Eurostat said. Inflation could pick up in the coming months as the decline in the value of the euro, which is near a two-year low against the dollar, makes imported fuel and other commodities more expensive.

As in previous months, Greece and Spain had the highest unemployment rates, with 27 percent and 24.4 percent. Austria, with 4.7 percent unemployment, and Germany, with 4.9 percent, had the lowest rates.