The challenge of negative numbers: Dragons against deflation is not enough – The Republic

Rome – The economy of negative numbers has not yet decided to leave Europe. The data that comes from Eurostat say deflation still bites: after -0.2 in February compared to the previous twelve months also marks the March result -0.1 per cent on an annual basis. The same signal comes from Istat data: even in Italy in March, on an annual basis, there was a fall of 0.2 percent in prices following the -0.3 in February.

The 2016 does not it seems in appearance to the output signals from deflation: not just the fractional improvement on an annual basis, in Europe and in Italy, in February and March. The result remains a concern although the increase month on month from prices recorded in Italy, between March and February, up 0.2 percent can provide hope.

If you want to localize and analyze reasons that despite the action of Mario Draghi has deepened the negative territory in interest rates on deposits and reset the discount rate of Frankfurt, you have to look at the geopolitical and oil. The price per barrel fell from July of 2014 by 70 percent, and if you go to look at the disaggregated data for March Eurostat it turns out that, excluding energy prices, inflation in the eurozone would be positive Nineteen of 0 , 9 percent in March on an annual basis. The same is true for Italy where the Istat a table records inflation “underlying” net energy and volatile prices of fresh food “” amounted to 0.6 percent.

This it can moderate pessimism, but not make us forget that the goal is to get closer to the fateful 2 percent, which is the inflation target in Europe. The question remains open, because the ECB itself in its March Economic Bulletin noted that the projections of the swap rate five-year inflation-linked, highly regarded indicator, showed a disquieting decline in recent days by 1.58 share share 1.48 percent.

the question then moves, therefore the recipes, on the need to start European investment, to strengthen the plan Juncker and moderate requests Schaeuble who intends to condition the disbursement of funds structural, only shot in the arm for the European economy, to the path of reform. The eye should also be addressed to the dynamics of income and wages: the ECB itself has been an increase of the content of wages in Europe and a poor productivity growth. A problem that will have to confront the government and social partners. As noted by the director of Ref, Fedele De Novellis, “out of the negative trend can not but consider that the growth forecast of labor costs in the private sector because of the contracts are only 1 percent, while for the public they are zero. ” The challenge of negative numbers remains open.

Topics:

Policy

deflation

inflation

bce

Starring:

mario dragons