By Abdulselam Durdak
Frankfurt letter, Feb. 27

-Eurozone annual inflation close to ECB’s target

According to Eurostat, the statistical office of the European Union, Euro area annual inflation was 1.8 percent in January 2017, up from 1.1 percent in December 2016 and 0.3 percent in January 2016.

Annual inflation met market expectations and confirmed the previously announced flash data. In the Eurozone, the final core inflation increase of 0.9 percent year-on-year in January was also in line with forecasts and flash data.

The inflation figures were so close to the European Central Bank's (ECB) target of "below but close to 2 percent" for the first time in December. But, January’s annual inflation reached the ECB's target more than December’s figures.

However, for ECB President Mario Draghi, who plans to take a closer look at the dynamics of inflation and to evaluate the factors underlying inflation more thoroughly, these developments do not necessarily mean an end to plans of monetary expansion or the policy of low interest rates.

The bank is expected to explain details of the dynamics of its inflation policy at its meeting in March.


-Eurozone PMI forecasts 0.6% growth in first quarter

The Markit Eurozone Purchasing Managers' Index (PMI) registered 56.0 in February, the highest since April 2011, according to the preliminary 'flash' estimate which was up from 54.4 in January.

The rise in the flash PMI means that GDP growth of 0.6 percent could be seen in the first quarter if this pace of expansion is sustained into March.

The Eurozone PMI is produced by Markit and is based on original survey data collected from a representative panel of around 5,000 companies based in the euro area manufacturing and service sectors.




27 Feb,2017