Eurozone Inflation Climbs To ECB Target
April 28 2017 - 4:50AM
RTTF2
Eurozone inflation accelerated more-than-expected in April,
returning within the European Central Bank's target of 'below, but
close to 2 percent', preliminary estimate from Eurostat showed on
Friday.
Elsewhere on Friday, results of an ECB survey showed that
professional forecasters expect euro area consumer prices to rise
faster than earlier expected, though core inflation was seen to
pick up only slowly.
Headline inflation climbed to 1.9 percent from 1.5 percent in
March, the Eurostat said. Economists had forecast the annual rate
to rise to 1.8 percent.
Core inflation that excludes energy, food, alcohol & tobacco
accelerated to 1.2 percent from 0.7 percent in March. The latest
level was the highest since September 2013.
"A large part of this rebound can be attributed to the late
Easter we had this year," ING Bank economist Bert Colijn said.
"Expect next month's release to show weaker price growth though
as underlying inflation remains weak."
Among components of consumer prices, energy showed the biggest
annual growth of 7.5 percent. Services cost advanced 1.8 percent
and that of food, alcohol and tobacco by 1.5 percent.
Non-energy industrial goods prices rose only 0.3 percent.
The ECB maintained its monetary policy unchanged on Thursday,
with President Mario Draghi saying that while growth was gaining
momentum and broadening, underlying inflationary measures remained
subdued.
The bank thus signaled that it has not intention of winding down
its massive stimulus any time soon.
Average headline inflation expectations for 2017, 2018 and 2019
were raised to 1.6 percent, 1.5 percent and 1.7 percent,
respectively, the ECB Survey of Professional Forecasters said.
The earlier projections were 1.4 percent, 1.5 percent and 1.6
percent. The longer-term inflation expectation was left unchanged
at 1.8 percent.
Expectations for inflation excluding food and energy were 1.1
percent, 1.3 percent and 1.5 percent in 2017, 2018 and 2019,
respectively. The figure is seen rising to 1.7 percent by 2021.
Compared with the previous survey, the core inflation profile is
broadly unchanged, with a small downward revision for 2017 and a
small upward revision for 2019, the survey said.
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