Euro-Area Consumer Prices Stagnate in March After Revision

  • Timing of Easter holiday lifted prices for package holidays
  • Inflation in euro region remains well below the ECB's goal

A renewed decline in euro-area consumer prices has proved short-lived after data for March was revised to show stagnation.

The inflation rate in the 19-nation bloc was unchanged, the European Union’s statistics office in Luxembourg said Thursday, revising an earlier reading of minus 0.1 percent. Prices fell an annual 0.2 percent in February, which was the first drop in five months.

“There is a lot of noise between February and March, and again there will be some pullback and some volatility in the April figures because of the timing of the Easter holidays,” said Frederik Ducrozet, an economist at Banque Pictet in Geneva. “The broader picture has not changed.”

Inflation remains well below the ECB’s goal of just under 2 percent, which it hasn’t been near since 2013, and a moderate economic recovery has been insufficient to counteract falling oil costs. The ECB has expanded its debt purchasing to fight deflation, stepping up monthly bond purchases to 80 billion euros ($90 billion) from 60 billion euros, one of a raft of new measures unveiled by President Mario Draghi last month to spur price growth.

Core inflation, which strips out volatile elements such as food and energy accelerated to 1 percent in March from 0.8 percent in February, unchanged from the initial estimate.

The largest upward contribution to inflation in March came from restaurants and cafes, where prices rose 1.5 percent, which added 0.12 percentage points to the headline reading. The cost of package holidays increased 5.7 percent.

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