Eurozone inflation fully meet expectations

Eurozone inflation fully meet expectations, which revived the concerns about possible solutions to the European Central Bank (ECB). The consumer price index rose by 0.4% yoy in September, in line with expectations of economists and analysts tracking the movement of prices in the European Monetary Union. While the annual inflation remained unchanged in August, a month that consumer price index in the Eurozone grew by 0.1%. In September, the reported growth of 0.4% compared to August, show that Eurozone generates the highest inflation rate since October 2014.

The core inflation also meet the forecast and stood 0.8% in September. Despite the troubling indicator on a monthly basis, inflation in the Eurozone remains far below the ECB target. Mario Draghi will need to make a further step towards increasing the incentives before they can consider their gradual elimination.

While consumer prices are barely growing and the recovery is still fragile, the majority of economists forecast that the governor of the European Central Bank (ECB) likely will extend the program to purchase assets.

Probably this decision will be taken in December and not on the upcoming Thursday meeting of the ECB. Expected duration of the program will extended at least until the second half of 2017, whereas the currently projected plan it must be completed at the end of March 2017. Even in the second half of 2017, however, the program will be stopped only if Eurozone inflation exceeded 1.5%.

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