According to the European office, the annual inflation rate in the eurozone dropped in July 2009 to minus 0.7 percent from minus 0.1 percent in June, and from 4percent in same period of the previous year, respectively; in the European Union, the annual inflation rate reached 0.2 percent, compared to 0.6 percent in June and 4.4 percent in the same period of the last year.
In July 2009, the lowest annual inflation rates were in Ireland (minus 2.6 percent), Belgium (minus 1.7 percent), Luxembourg (minus 1.5 percent). At the opposite end, Romania appears with a five percent price rise, followed by Hungary (4.9 percent) and Poland (4.5 percent).
The lowest inflation rate year-on-year was registered in Ireland and Portugal (each 0.5 percent), Germany, France and Luxembourg (1.1 percent each), whereas the highest rates were in Latvia (8.8 percent), Lithuania (7.8) and Romania (6.6 percent).
An annual inflation rate of less than 0.7 percent represents an all-record low since the launch of the euro in 1999.
After hitting a record-high four percent in June and July 2008, the annual inflation rate in the euro area fell sharply thereafter, as prices for oil and other raw materials decreased due to the slowdown in global economy.
December 2008 was the first time since August 2007 when the annual rate of inflation in the euro area fell below the target of two percent envisaged by the European Central Bank.
The decrease in inflation opened the door to a series of interest rate cuts by the European Central Bank, which reduced the reference interest to one percent, the lowest level in the institution’s history; analysts expect this level to be maintained.