Euro area annual inflation fell to -0.1% in September
According to Eurostat, the euro area annual inflation rate fell to -0.1% in September 2015 against 0.1% in August 2015. This is far below the European Central Bank’s (or ECB) target inflation rate of near 2.0%. On a monthly basis, the consumer price index in the euro area increased 0.20% in September 2015.
Core inflation increased to 0.9% in September
The core inflation rate, which excludes the prices of energy, food, alcohol, and tobacco, rose 0.9% in September 2015. This implies that the fall in energy prices has dragged inflation rates in the euro area.
Contributing toward the fall in energy prices, fuel for transport fell by -0.71% and heating oil fell by 0.25%. Energy stocks such as TOTAL (TOT), Repsol (REPYY), and Eni (E) have fallen by 6.2%, 37.4%, and 12.2%, respectively, over the past year as of October 16, 2015.
In September 2015, negative annual rates were observed in seventeen euro area member states. Annual inflationary pressure was seen in restaurants and cafés and vegetables by 0.12% and 0.11%, respectively, and in tobacco by 0.08% in September 2015.
Oversupply and falling demand for crude oil have lead to a fall in crude oil prices. However, crude prices are stabilizing and may reduce the negative impact on inflationary pressure going forward.
The Chinese economic slowdown is affecting economies across the world. In the next article, let’s take a look at growth prospects in China.