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Ireland Reports Positive Inflation

James Boston
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Ireland Reports Positive Inflation

Economic activity is showing signs of revival in the periphery Eurozone countries, the early bail out nations are beginning to outperform the larger central European economies, albeit coming from a way behind to begin with. This morning’s inflation data out of Ireland goes some way to confirming this. Consumer Price Index (CPI) data for the month of August shows a pick up in price growth activity compared to deflationary readings in July. Month on month the Irish CPI is now displaying 0.2% price growth reversing the -0.2% fall the previous month. The year on year CPI has ticked up to 0.4% expansion from the 0.3% reading in July. The Harmonized Index of Consumer Prices (HICP) is registering even higher, year on year this now stands at 0.6% up one tick from July’s 0.5% reading. The month on month HICP has turned around a -0.1% fall in July to come in at 0.3% for the August reporting period.

The Portuguese inflation rate, although still negative, made up some substantial ground also in August, domestic demand and exports have also strengthened in this periphery Eurozone country. Greece meanwhile has a long way to go but is rumoured to be considering a return to the bond markets and investors will welcome this morning’s update to the Unemployment level which showed a continued improvement from 27.1% to 27.0% for the month of June.

France was the only one of the major Eurozone economies to positively surprise markets during this round of inflation updates. This morning’s CPI data for August, which is normalized to EU standards, shows a strong turnaround on the July deflationary readings. Month on month this has been reported at 0.5% price growth, the previous reading was a contraction of -04% and analysts had only expected today’s number to reach 0.4%. The year on year number however came in slightly down on the previous reading, this was 0.5% compared to July’s 0.6% price growth.

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