Consumer prices in the 16 countries that use the euro declined in June from a year earlier, marking the first negative reading since records began in January 1997.
The euro zone’s annual consumer-price-index rate fell 0.1% in June from a year earlier, the European Union’s official statistics agency, Eurostat, said Tuesday. In May the annual rate was flat. While a decline was expected, economists surveyed last week had forecast a steeper decline of 0.2%.
The annual CPI rate remains well below the level of about 2% that the European Central Bank targets in the medium term. However, the central bank has previously said it expects consumer prices to decline for several months before returning to positive territory by the end of the year.
Other data reported earlier Tuesday suggest that consumer prices may continue to fall for some time. The forward-looking producer-price indexes for May from both France and Italy dropped sharply from a year earlier
In France, producer prices fell by 0.2% from April and by 6.7% from a year earlier, although the French statistics office Insee said this was a less steep decline than the 7.8% annual fall reported in April.
In Italy, producer prices fell by 0.2% from April and by 6.1% from a year earlier, the sharpest drop since January 2006.
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