Eurozone deflation eases, unemployment drops

GMT 12:29 2015 Tuesday ,31 March

Arab Today, arab today Eurozone deflation eases, unemployment drops

Prices in the 19-nation eurozone were down
Brussels - AFP

Deflation in the eurozone eased in March, official data showed Tuesday, reducing concerns that the economy faces a dangerous spiral after four straight months of falling consumer prices.
Prices in the 19-nation single currency bloc were down 0.1 percent in March, less than the drop of 0.3 percent in February with low energy costs still impacting the cost of living, the EU statistics agency Eurostat said.
Unemployment also slipped to 11.3 percent in February, down from a revised 11.4 percent in January and 11.8 percent a year before in a further positive sign.
The threat of deflation in the eurozone remains a global concern, with fears that a huge bond-buying spree by the European Central Bank came too late to fight off the negative effects of falling prices.
Prices first fell into negative territory in December with a -0.2 figure and hit -0.6 percent in January. But the easing to -0.3 percent in February and the further weakening in March will be welcomed by the ECB.
However, after stripping out volatile energy and food prices, so-called core inflation still fell to 0.6 percent from 0.7 percent a month earlier.
In January, the ECB set out its huge bond-buying programme, an audacious and controversial scheme to ward off deflation and stimulate growth in the eurozone, which expanded a weak 0.9 percent in 2014.
But with a cash-strapped Greece in a bitter row with its European partners and on the cusp of tumbling out of the euro, analysts fear that a new debt crisis in the eurozone could affect the world.
On Monday, Fitch ratings agency said a renewed eurozone debt crisis was the biggest risk to the global economy, even greater than unstable oil prices and despite the ECB's quantitative easing programme.
Joblessness remained hugely varied across the 19 nation eurozone, with a record low 4.8 percent in Germany and alarmingly high levels persisting in Spain, at 23.2 percent, and 26 percent in crisis-hit Greece, the highest rate in Europe.
Youth unemployment in Greece stood at a huge 51.2 percent and 50.7 percent in Spain.
The data for Italy, the eurozone's third biggest economy remained a worry, with unemployment at up to a high 12.7 percent in February and youth unemployment at 42.6 percent.
French unemployment remained flat at 10.6 percent.
The biggest drops in unemployment were felt in small nations Estonia down to 6.2 percent from 8.4 percent a year earlier and Ireland, down to 9.9 percent from 12.1 percent.
Across the 28-member EU, unemployment stood at 9.8 percent in February, down from 9.9 percent in January and 10.5 percent a year earlier.


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