It now predicts price growth at 0.1 percent in 2015 and at 1.1 percent in 2016.
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But this latest data will increase the prospect for even more stimulus by the European Central Bank , which has downgraded its inflation forecasts for the coming years in the face of falling oil prices.
House prices fell sharply across the euro zone in 2009, then dipped again in 2012 and 2013, unwinding imbalances that built up before the financial crisis and putting the current recovery on a more solid footing, the European Central Bank said in an economic bulletin.
Inflation was subdued in nearly all of the 19 countries using the euro.
At first glance, deflation, which is generally defined as a sustained drop in prices, sounds good as it allows consumers to buy things for less.
“The total amount that we have purchased represents 5.3 per cent of the GDP of the euro area, whereas what the [US] Fed has done represents nearly 25 per cent of the US GDP, what the Bank of Japan has done represents 64 per cent of the Japanese GDP and what the United Kingdom has done is 21 per cent of the UK’s GDP”, he said in an interview with Thomson Reuters yesterday.
ECB may also facilitate banks in lending to companies and households.
“I don’t think that there’s any alternative as far as the central bank is concerned”, said a trader.
The governing council of European Central Bank is showing its concerns on the slowdown in foreign trade as it’s impacting the exports. Annual wage inflation slowed to 1.9% from 2.0%. That reading is the lowest in four months, and compares to an initial estimate of 0.2 percent in August.
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“Unemployment remains high and underlying domestic price pressures are weak”, the OECD said in its Interim Economic Outlook.
