Inflation down to -0.2% across Europe

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Inflation fell in April from March by .02% across the EU, Eurostat figures show.

Seventeen member states of the European Union showed negative interest rates, with the lowest in in Romania (-2.6%), Bulgaria (-2.5%) and Cyprus (-2.1%).

The trend is worrisome despite increasing GDP, with the Eurozone recently reaching pre-2008 levels.

Negative inflation rates mean the price of goods and services goes down, but that does not necessarily mean good news. Falling prices can represent a lack of demand, and can also mean lower interest rates, making people less likely to save their money in financial institutions.

The European Central Bank  has an target inflation rate of “just under 2%” and the current data show they are missing the mark by a wide margin.

One large cause for such inflation figures is the current low price of oil, an essential material in the production and transportation of goods.

In May, European Economic Affairs Commissioner Pierre Moscovici warned inflation would remain low and stagnant “for a longer period than previously forecast.”

Not all EU members states have negative inflation, however. Belgium (1.5%) and Sweden (1.0%) still have positive inflation that represents the closest points to the ECB target, although Sweden is not a member of the Eurozone.

The biggest impacts on inflation came from restaurant and cafe services, which saw an uptick of 0.13% in prices. Rent also rose by 0.08%, and tobacco by 0.05%. Heating products gas and oil were down, due to lower energy prices as well as Europe emerging from winter.