The inflation rate in the Eurozone in May 2009 is 0,0% year-on-year for the first time since it came into existence.

The prices in the Euro area stopped rising, and deflation is expected to grip the 16-nation zone in summer 2009.

Inflation stood at 0,6% in April, 2009, after hitting 4% when energy prices hit record hights.

"Today's data poured some cold water on any nascent hopes of a recovery. A slip into deflation in the next couple of months looks odds-on", Colin Ellis from Daiwa Securities commented for the BBC.

Deflation is considered damaging to an economy as consumers tend to delay making purchases until prices fall further. Without consumer spending to stimulate growth, economic output falls.

Separately, official figures showed an unexpected rise in retail sales in Germany in April.

A 0,5% increase from the previous month has raised hopes that consumer spending could help to support Europe's largest economy after its record slump in output in the first quarter of 2009.

"So far, consumers have been the positive surprise during the recession. Consumer confidence has been stable for several months. Now, it looks as if consumers are finally putting their money where their mouth is", Carsten Brzeski from ING said.

We need your support so Novinite.com can keep delivering news and information about Bulgaria! Thank you!