BRUSSELS: Euro area inflation could dip into negative territory in the first half of 2016 but the threat of entrenched deflation has been averted and prices will rise in the second half, European Central Bank Governing Council member Ewald Nowotny said on Thursday.
“I think it’s important to look at the medium term. In the second half, we could already see a clear increase in inflation because of the base effect from the previous year,” said Nowotny, who is also the head of the Austrian central bank.
“I wouldn’t speak of a deflationary risk, per se. It could be the case in certain months but that is not deflation. I think it was the success of the previous policy of the ECB that we prevented a deflationary scenario in Europe,” he added.
Copyright Reuters, 2016
Courtesy : BRecorder