BRUSSELS: The inflation in the 19-country Eurozone unexpectedly fell into negative territory in February, official data showed on Monday, suggesting the bloc’s massive stimulus measures by its central bank struggled to inject vigor into its sluggish economy.
The annual inflation rate was expected to be negative 0.2 percent in February, down from 0.3 percent in January, said Eurostat, the statistic agency of the European Union.
The Eurozone’s inflation fell into negative water last September, and has stood around 0.2 percent since, which was far away from the targeted around 2 percent inflation goal set by the European Central Bank (ECB).
The agency announced on Feb. 25 that it nudged down the Eurozone’s inflation to 0.3 percent in January, lower than its previous estimate of 0.4 percent.
February’s decline was partly down to an expected fall in energy inflation as well as weakened food inflation, but economists cautioned that “most worryingly,” the core rate, excluding food and energy, fell from 1.0 percent to a ten-month low of 0.7 percent in February.
“With the recovery apparently now slowing and wage growth subdued, core inflation is likely to remain very weak,” said Jennifer McKeown, senior European economist of Capital Economics.
The ECB announced in December 2015 that it would extend an asset purchasing program for three months and cut a key interest rate to a record low level, but the move was called “disappointing” as more policy action was needed to promote the sluggish economy.
In last January, the bank embarked on a massive trillion-euro asset purchases program, dubbed as quantitative easing, and has since been buying 60 billion euros (about 65.35 billion U.S. dollars) of assets every month, aiming to shore up the zone’s economy and hit the inflation target.
