-Howard Archer, IHS Global
The Euro zone's inflation remained stuck in negative territory in March, but return to positive price growth is around the corner. Annual inflation in the 19 countries sharing the Euro was -0.1% in March, Eurostat confirmed the preliminary estimate, following the 0.3% decline a month earlier. However, only nine out of the Euro zone's 19 member states are now in deflationary territory, down from 17 in January. In addition to that, month-on-month cost of living rose by 1.1%, indicating a slide into entrenched deflation is now unlikely. Thus, it is expected that consumer prices may enter positive territory as soon as April. The monthly increase in core inflation, which irons out volatile food and energy components, was at 1.2%. In order to stimulate growth in the Euro area's consumer inflation, the European Central Bank unleashed a 1.1 euro trillion bond-buying programme last month. The programme is due to last until September 2016, with the ECB predicting inflation is likely to hit 1.8% 2017.
Meanwhile, a separate report showed, the Euro zone's current account posted a seasonally adjusted surplus of 26.4 billion euros in February, compared with 30.4 billion euros in the preceding month. On a non-seasonally adjusted basis, the measure widened to 13.8 billion euros compared with a revised 8.3 billion euros reported in the previous month.
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