Eurozone Consumer Prices Fall to Minus 0.2% in February 2016

Eurozone’s economy is back into deflation after the consumer prices fell sharply in February to minus 0.2%, putting more pressure on the European Central Bank (ECB).

The slide into deflation is a sharp reversal from the revised 0.3% increase recorded in January.

According to Eurostat, it is the first fall in inflation since September when it shrank by 0.1%.

Energy drove the decline, with prices down 8% in February compared to a 5.4% slide in January.

The dismal figures have dashed hopes that ECB efforts to boost prices were working. That raises the chance of the bank announcing further stimulus measures next month.

It has already announced a cut to its bank deposit rate, which remains in negative territory.

ECB chief Mario Draghi insisted earlier this month the policies were working.

Economic sentiment across the eurozone deteriorated more than expected in February, according to research by the European Commission.

The finance ministers from G20 and central bankers agreed on February 27 to use “all policy tools, monetary, fiscal and structural – individually and collectively” to renew growth.