Inflation Remains Low in Euro Area

Threat of Deflation Persists

May 01, 2014, 10:00 ET from The Conference Board

NEW YORK, May 1, 2014 /PRNewswire/ -- In March 2014, annual inflation as measured by the Harmonized Index of Consumer Prices (HICP) decreased in all European economies compared except Switzerland.

Despite a slight acceleration in price growth in March (from -0.2 to -0.1 percent), Switzerland continued to experience deflation (negative inflation) for the second consecutive month.

In the U.S., robust price growth of nearly half a percentage point pushed inflation over one percent (from 0.8 to 1.2 percent). In Japan, price growth increased from 1.9 to 2.0 percent.  

"In March, Spain and Sweden joined Switzerland among the ranks of deflationary economies," said Elizabeth Crofoot, Senior Economist with the International Labor Comparisons program at The Conference Board. "Germany's dip to below one percent inflation in March is a wakeup call that even the euro area's largest economy is not immune to deflationary pressures. For the euro area as a whole, the combination of low inflation and record unemployment suggests that inflation will remain low in the foreseeable future."

March inflation was highest in Japan (2.0 percent), Norway (1.8 percent), and the United Kingdom (1.7 percent), and was lowest and negative in Sweden (-0.4), Spain (-0.2 percent), and Switzerland (-0.1 percent). While Switzerland has had recent bouts of deflation, falling prices have not occurred in Sweden since 1998 and in Spain since 2009, during the global financial and economic crisis. In Germany, inflation (0.9 percent) dropped below 1 percent for the first time since June 2010.

About HICP and International Labor Comparisons (ILC)
Harmonized Indexes of Consumer Prices are measures of consumer price inflation that have been standardized across countries based on European Union definitions. A monthly report compiles HICP trends for 16 economies, alongside conventional Consumer Price Indexes (CPI) as measured by national governments. The Conference Board adjusts official HICP and CPI metrics to a common base year to facilitate comparison with the United States.   

The data is published as part of The Conference Board International Labor Comparisons program. Formerly a division of the U.S. Bureau of Labor Statistics, ILC is dedicated to producing economic indicators that optimize research, comparison, and planning in a global context.

For more information about The Conference Board ILC program:

For the associated report, tables, and technical notes, see

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