Prices fall in Spain for fifth straight month
The government dismisses deflation fears and attributes falling prices to the summer sale and sharp drop in oil prices same time last year.
Madrid – Spanish consumer prices Spain fell 1.4 percent in July from 12 months earlier in the fifth consecutive monthly decline, official data said Wednesday, raising further fears of deflation.
The figure released by national statistics body INE confirmed its provisional estimate published at the end of July.
In March, Spain posted its first 12-month drop in prices since INE began tracking inflation in 1961, with a 0.1-percent decline that month.
Prices dropped another 0.2 percent in April, 0.9 percent in May and 1.0 percent in June.
Spanish inflation, which has generally been higher than the eurozone average over the past decade, is now slowing more sharply than the rest of the region as its economy slumps.
Deflation, characterised by a prolonged period of falling prices, can be harmful to the economy as it often leads consumers and companies to hold back on spending as they wait for better deals.
But the government Thursday dismissed deflation fears.
"We have not seen and do not hope to see" a ‘persistent and generalised’ fall in prices," the secretary of state for the economy, Jose Manuel Campa, told reporters at a news conference.
He said the latest fall in prices was due mainly to a sharp drop in the price of oil from the same time last year and the summer sales.
Spain entered into its first recession in 15 years at the end of 2008.
AFP / Expatica