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Spillovers to the euro area from recent negative inflation in China
This box discusses potential spillovers from recent negative inflation in China to euro area import prices. Economic developments in China are transmitted to euro area import prices directly via China’s export prices and indirectly via China’s important role in global demand for commodities and as a key supplier of intermediate and capital goods to the rest of the world. This box finds a tangible impact on euro area import prices, but a more limited impact on the broader euro area inflation environment.[ 1 ] Following a surge in the past two years, euro area import prices have declined in recent months. In June ... (full story)