Eurozone Inflation March 2017


Eurozone: Inflation eases in March

March 31, 2017

Harmonized inflation eased in March after coming in at the highest level since December 2012 in February, according to a flash estimate released by Eurostat on 31 March. Harmonized inflation was 1.5%, below February’s 2.0%. The result was below market expectations of a 1.8% reading. March’s figure brought inflation under the ECB’s target of just under 2.0% and should ease some pressure on policymakers to end their ultra-loose monetary policy stance.

According to Eurostat, the main contributor to March’s moderation was a smaller rise in energy prices as well as food, alcohol and tobacco prices. Core inflation edged down to 0.7% from February’s 0.9%, suggesting that underlying price pressures are still moderate. Month-on-month price variations and a more detailed set of data will be provided on 19 April.

FocusEconomics Consensus Forecast participants see inflation in the Euro area averaging 1.6% in 2017, which is up 0.1 percentage points from last month’s forecast. For 2018, panelists expect inflation to average 1.5%.

Author: Angela Bouzanis, Senior Economist

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