Inflation rate was 1.2% in April; this is too low and does not match ECB mandate

April inflation rate was 1.2% in the Euro Area. This rapid drop needs an answer from the ECB as this level is well below its target (inflation rate stable but slightly below 2%)
The main reason for this lower inflation rate is the energy price contribution that went to 0 in April. If as the IMF said last month global growth momentum does not accelerate, this contribution will remain low as no pressures are expected on oil price (except may be in June as price was much lower last year but it was temporary, see chart at the bottom of this post).
On the first chart, services and good sectors contributions are low and will remain low as far as economic prospects in the Euro Area de not improve strongly.
With low pressure from the global outlook and from the weak economic situation in the Euro Area, inflation rate will remain low, well below the ECB commitment.

Mario Draghi must give a clear answer to this issue. Too low inflation rate is an incentive to move for the ECB, to satisfy its mandate and to avoid deflation risk.


Oil price comparison between 2012 and 2013