PARIS: Prices in Germany and France developed out of sync in February, reflecting a gap in growth levels for Europe’s two largest economies. While Germany’s recovery is gaining momentum, France looks increasingly stuck.
The French economy remained stuck in deflation in February as consumer prices fell by 0.3 percent compared to the same month a year earlier, according to official figures released Thursday by the national statistics office.
The figure followed a decline in annualized prices by 0.4 percent in January – the first time in five years that the French economy had slipped into deflation.
Since the end of 2014, prices have been falling in most countries using the euro currency, raising the pressure on the European Central Bank (ECB) to act in order to reach its target of keeping inflation “close to, but below” two percent.
On Monday, the ECB launched an huge bond-buying program to the tune of 60 billion euros a month. Its total value is expected to reach 1.1 trillion euros ($1.2 trillion) by September 2016.
The audacious and controversial scheme is intended to ward off deflation and stimulate growth in the eurozone.
