BRUSSELS: Eurozone inflation tumbled to negative territory in September with consumer prices falling 0.1 percent on an annual basis, official data showed on Wednesday, adding up pressure on the single currency bloc’s central bank to expand its asset purchase program.
Energy price slumped by 8.9 percent year-on-year in September, acting as the biggest drag on the zone’s inflation, according to Eurostat, the statistic agency of the European Union (EU).
The prices of food, alcohol and tobacco were up 1.4 percent. Eurostat said that core inflation, which excludes energy and food, remained positive after the prices of services saw an yearly increase of 1.3 percent.
September’s decline suggested the zone is still far away from the 2 percent inflation targeted by the European Central Bank (ECB), which recently has signaled that more stimulus measures would be needed to fuel growth and prop up confidence if the prices further dropped.
In January, the bank has embarked on a massive trillion-euro asset purchases program, dubbed as quantitative easing, and has since been buying 60 billion euros of assets every month, aiming to shore up the zone’s economy and hit the inflation target.
Economists argued that inflation is unlikely to remain negative for long. “Unless oil prices fall further, the effect of lower energy prices on the headline inflation rate will fade over the next year,” said Jack Allen, a European economist of Capital Economics.
