Eurozone inflation recovers slightly in March, but still at minus 0.1%

LONDON (ICIS)–Eurozone inflation in March is expected to be minus 0.1%, up from minus 0.3% in February, weighed down by energy prices that fell during the month by almost 6%, according to a flash estimate published by European statistics agency Eurostat on Tuesday.

While the services sector registered in March price rises of 1% and food, alcohol and tobacco experienced an increase in prices of 0.6%, non-energy industrial goods and energy registered falls of 0.1% and 5.8%, the latter dragging down the average index for the region.

The flash estimate for March shows a recovery in inflation that may reflect the European markets reacting to the European Central Bank’s quantitative easing programme, which was announced in January. The ECB’s main mandate is to keep inflation close to, but below, 2%.

Another sign of the eurozone’s economy gaining momentum was revealed by the PMI index for the manufacturing sector published by Markit Economics on 24 March, which showed the industrial sector’s activity at a near four-year high.