1st May 2015

Economic Policy: Eurozones exits deflation spiral

According to a flash estimate of the Eurostat, inflation rate in the eurozone was 0.0% in April, up from -0.1% in March. It was the first non-negative value in four months, thus ending the shorter than expected period of deflation. Economists were worried about prospects of prolonged low inflation or deflation, such as in Japan over the last two decades. This prospect is now much less likely. Apart from energy, all sectors showed slow growth in prices. However, also energy prices dropped less than earlier. Together with the massive QE program of the ECB, inflation is expected to grow steadily. Mario Draghi, ECB´s president, promised to keep the QE going until the inflation is well on target of “below, but close to 2%”.

Eurostat also published its estimates for unemployment in March 2015. The seasonally-adjusted value for the eurozone was 11.3%, which is the same value as in February, and only modestly less than last year. The EU28 unemployment was 9.8% in March 2015, stable compared to February, and down from 10.4% last year.

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Members of the American Chamber of Commerce in the Czech Republic