January 7, 2015. The
CNN’s article titled Europe sinks back
into deflation, talks about the current trend of the economic crisis that
the European Union is going through. In the last month, consumer prices in the
Eurozone fell by 0.2% for the first time since the Great Recession. Alana
Petroff, the author, states that what concerns economists the most is that
because of deflation, consumers will stop buying in hopes that prices will keep
going down. This would be a very big problem for the European economy, since it
is already in a stagnant state. The fall of oil prices is one of the reasons
Howard Archer, the chief European Economist at IHS in London, believes that the
Eurozone will go through several more months of deflation.
The
European Central Bank is expected to take action in order to stimulate the
economy and raise prices, as deflation could bring along many other problems
for European countries. Official data shows that unemployment in the Eurozone
is reaching record high levels. Additionally, many investors have decided to
switch to dollars, which is weakening even more the value of the euro.
-Ricardo Morales
-Ricardo Morales
No comments:
Post a Comment