Euro area inflation expected to be stable at 0.9%

Brussels, March 3 The euro area inflation rate continues to be positive in February, with the harmonized index of consumer price (HICP) reading at 0.9 per cent, the statistical office of the European Union (Eurostat) said.

It was the second consecutive month that had witnessed a positive HICP, Xinhua news agency quoted Eurostat as saying on Tuesday.

The energy component of the HICP remains negative at minus 1.7 per cent, but recovered from minus 4.2 per cent in January with a strong momentum regained late last year.

The return of positive readings after months of Covid-19-related negative inflation is expected to step up when restrictive measures are further eased in the second half of 2021, analysts said.

"A simple return to pre-coronavirus levels would push... Inflation above 2 per cent in the second half of the year," wrote ING's senior economist Bert Colijn and Global head of macro Carsten Brzeski on Monday.

"Unless there are any second-round effects on wages in the making, the ECB (European Central Bank) will turn a blind eye to these developments.

"This is not an easy task but any premature normalising of monetary policy would risk choking off the still-fragile economic recovery," they added.

( With inputs from IANS )