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Inflation remains weak in eurozone as ECB mulls stimulus

By The News · 01 of July 2019 04:38:20
AP Photo,, No available, The buildings of the banking district are seen along the river Main in Frankfurt, Germany, late Thursday, June 27, 2019. (AP Photo/Michael Probst)

FRANKFURT, Germany (AP) — Consumer price inflation across the 19 countries that use the euro remained stuck at an annual 1.2% in June, well below their central bank’s goal despite years of stimulus policies.

The official figure released Friday by the EU statistics agency matched the May reading and came in short of the European Central Bank’s target of just under 2% considered best for the economy.

The figure for core inflation, which excludes volatile fuel and food prices, rose more than some expected, however, climbing to 1.1% from 0.8% in May. Core inflation is considered to give a truer picture of trends in consumer prices.

ECB President Mario Draghi said last week that unless inflation improves, more stimulus such as interest rate cuts or bond purchases will be needed.

In December, the central bank phased out a 2.6 trillion euro ($2.9 trillion) bond-purchase stimulus program that pumped newly printed money into the economy over almost four years, saying inflation was finally headed toward the target. But since then the bank has had to shift its stance toward more stimulus as economic indicators have been weaker and fears have grown that the U.S.-China trade conflict will hurt growth.

The European Central Bank holds its next policy meeting July 25.