SPEU - Eurozone - From Deflation To Reflation Risk?

• Rising shipping costs and lengthening delivery times have reignited the discussion about a return of reflationary forces.
• Business surveys in the eurozone industrial sector have started to point to some upward pressure on factory gate prices and potentially core goods prices.
• However, it is way too soon to shift the focus from deflation to reflation risk in the eurozone, not least with a double-dip recession in train.
• Disinflationary trends have been entrenched for a decade and, looking beyond some near-term transitory upward pressures on inflation, are likely to persist.

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