INFLATION in the Eurozone last month dropped to its lowest level in over four years, figures from Brussels revealed yesterday.
The fall in annual price growth from 0.7 per cent in February to 0.5 per cent in March – a 52-month low – will stoke fears of deflation in the currency union and raise the prospect of more monetary stimulus to come.
The European Central Bank (ECB) has been under increasing pressure to engage in unconventional policies in order to avert another crisis.
ECB president Mario Draghi has indicated that he may be willing to act if the consumer price measure remains in the “danger zone” of below one per cent growth.
Economist Howard Archer of IHS Global Insight added: “Spain has become the fifth country reporting deflation along with Greece, Cyprus, Portugal and Slovakia.”
Meanwhile, separate figures published by the Eurostat office yesterday showed the bloc’s current account surplus rising to €39.4bn in the final quarter of last year, up sharply from €24.1bn a year earlier.
The figure measures the flow of goods, services and investments in and out of the Eurozone.