Falling inflation a worry for Europe but also the world
By Ross Finley
LONDON (Reuters) - European Central Bank President Mario Draghi has moved closer to launching sovereign debt purchases and data this week will show just how dangerously low inflation has fallen in the $13 trillion euro zone economy.
A sickly Europe has held back global economic growth for years, and now it is contributing significantly to powerful forces already dragging down inflation across the globe.
A spectacular drop in crude oil prices over the past month will be the center of discussion when ministers from the world's top oil exporters meets in Vienna on Friday.
The key question there is whether Saudi Arabia, which signaled last month it was comfortable with lower oil prices, accelerating a plunge in the price of crude to a third since June, will stick to that view.
But rapidly-increasing U.S. oil production, coinciding with shaky demand from China and Europe, is likely to keep a lid on the price no matter what the Organisation of Petroleum Exporting Countries (OPEC) decides.
The latest Reuters poll suggests euro zone inflation relapsed to 0.3 percent in November, far from the ECB target of just below 2 percent.
"It is essential to bring back inflation to target and without delay," Draghi said on Friday.
"Monetary policy can and will do its part to achieve this. But it is also clear that, as monetary policy works on the demand side of the economy, other policies can assist in this process – or at least not counteract it." Continued...