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Deflation threatens eurozone countries Updated: 2016-05-02 10:03:54 KST

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2016-05-02

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The European Union's statistics agency‚ Eurostat‚ has announced that the eurozone slipped back into deflation as consumer prices in April fell by zero.two percent on-year. The figure is down from the previous month's annual rate of zero percent and is below market expectations for a more modest decline of minus zero.one percent. Core inflation‚ which excludes prices of volatile items such as food and energy‚ dropped from one percent in the year to March to zero.seven percent in April. This means prices are once again falling‚ having come out of deflationary territory in March‚ and are well behind the two percent inflation target set by the European Central Bank. Major countries in the eurozone have been hit hard by the fall in prices. The Harmonized Index of Consumer Prices in Germany and Spain dropped zero.three percent and one.two percent respectively in the year to April. France stayed in the minus territory for a third month‚ with its consumer prices falling zero.one percent year-on-year after a zero.one percent drop in March. Other countries‚ including Greece‚ Ireland‚ Singapore and Thailand‚ are also struggling with low consumer prices. The Bank of Korea says Korea does not face the risk of deflation since prices are forecast to increase from the third quarter peaking to its target of two percent. Kim Mok-yeon‚ Arirang News. Reporter :

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