BRUSSELS: The annual inflation in the 19-country Eurozone was expected to be 0.2 percent in December, stable compared to November, official data showed on Tuesday.
The price of food, alcohol and tobacco rose most in December by 1.2 percent, a reading weaker than the 1.5 percent in November, according to Eurostat, the statistic agency of the European Union (EU).
Services prices followed, up by 1.1 percent in December, while inflation of non-energy industrial goods kept unchanged at 0.5 percent, said Eurostat.
The energy prices continued to slump, down by 5.9 percent in December, but weaker than the 7.3 percent in the previous month.
The core inflation, excluding energy, food, alcohol and tobacco, remained unchanged at 0.9 percent, data showed.
December’s estimated inflation stood weaker than analysts’ consensus forecast of 0.3 percent, urging more stimulus measures from the European Central Bank (ECB) to bring inflation back to the targeted around 2 percent.
The Bank in December announced to extend an asset purchasing program for three months and cut a key interest rate to a record low, but the move was accused of “disappointing” as more policy action were needed to promote the sluggish economy.
“Admittedly, the weakness of food inflation may have been a temporary response to unseasonably warm weather. And with energy inflation set to rise further, we see the headline rate increasing steadily to around 1 percent over the next six months or so,” said Jennifer McKeown, senior European economist of London-based Capital Economics.
“But with GDP expanding only slowly, economic spare capacity will continue to exert downward pressure on core inflation,” said McKwown. “We still think that the ECB was too timid in December and see it being forced to up the pace of its asset purchases before too long.”
