- ING-Diba
Inflation level in the Euro area was revised to the upside by the Eurostat. The final reading gave a 0.4% price increase in August of the current year, as it was changed from the five-year lowest level of 0.3%. However, the indicator remains far away from the European Central Bank's target level of below, but close to 2%. Calculated without volatile products' price changes, the CPI grew from 0.8% to 0.9% last month. Recently, the ECB announced a start of the long-awaited asset purchases program, which is due to begin working in the foreseeable future. The Central Bank will mostly purchase privately owned securities. Economists explain the low inflation level by falling energy and food prices, which eases the threat of real deflation in the single currency zone. Costs of services, however, are rising moderately. Despite Mario Draghi's attempts to assure markets in ECB's long-term strategy to bring the CPI to the target level, investors tend to be rather pessimistic. The five-year inflation swap rate fell to 1.94%, meaning that it will be extremely difficult for the policymakers to reach the 2% inflation, even in the medium-term.
Besides that, trade balance surplus in Italy jumped to 2.82 billion euro in July, as exports slowed down by 1.6%, while imports lost 2.5% on a monthly basis. Balance of international trade in Spain, however, declined to reach the deficit of 1.82 billion euro.
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