Euro is not on the edge of deflation

Euro, which includes 16 countries, come to inevitable deflation, despite fall in prices in June, said President of the Eurogroup of finance ministers Jean-Claude Juncker, cited by AFP.
After the monthly meeting of the Eurogroup in Brussels and chairman of the European Central Bank Jean-Claude Trichet said that price declines have „brief in nature and ruled out the possibility of reducing the interest rate.
Permanent decline in consumer prices would encourage households to delay purchases in anticipation of lower prices, leading to reduced production and threaten jobs already strong reduction in many EU Member States, analysts note.

––––––––––––––––– ––––––––––

Finance