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A Framework That Provides Clarity

During periods of “low visibility,” confusion reigns: for every indication of one trend, there seems to be a countertrend. The key is to glean from the collective wisdom of reliable leading indicators a clear signal that the economy is headed for a turn.

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Apr 03 2014

The ECB & Spanish Deflation

In March, Spain slipped into deflation, according to flash estimates recently released by the Spanish statistical agency, leading many to voice fears of Spanish deflation “metastasizing” to the rest of the Eurozone. With some clamoring for the European Central Bank (ECB) to ease policy in response, the outlook for Spanish consumer price growth has clear implications for ECB policy in the months ahead.

ECRI has just updated its Spanish Future Inflation Gauge (ESFIG). The value of this forward-looking gauge lies in its ability to predict cyclical turns in Spanish inflation, and the latest ESFIG data clarifies whether Spanish inflation will continue its slide deeper into negative territory, or soon reverse course.