This has a countervailing effect on real disposable incomes, while also making disinflation more broadbased. Indeed, if we look at prices of non-energy industrial goods, which are mainly tradable, we see a downward trend across all euro area countries.
Local factors To add to this, aggregate inflation has been dragged down by local factors linked to the sovereign debt crisis and the process of relative price adjustment in stressed countries. Several euro area countries are currently undergoing internal devaluation to regain price competitiveness, both internationally and within the currency union.