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ECB's Praet says risk of price deflation limited: paper

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[October 28, 2014]  BRUSSELS (Reuters) - The risk of price deflation in the euro zone is limited and ECB figures suggest a much lower probability than those of the International Monetary Fund, ECB chief economist Peter Praet told two Belgian newspapers.

"The risk of deflation is limited. I have issues with the high probability (of 30 percent) the IMF has put forward. Our models give much lower numbers," Praet told the Tuesday editions of business dailies De Tijd and L'Echo.

Praet added, however, that policy makers would need to remain vigilant about price deflation.

Price inflation has reached all-time low in the euro zone. This benchmark of economic health is closely watched by the European Central Bank in deciding whether more needs to be done to shore up the economy.

(Reporting by Robert-Jan Bartunek; additional reporting by John O'Donnell in Frankfurt; editing by Barbara Lewis)

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