Spain ends inflation decline: official data

16th December 2009, Comments 0 comments

After eight months of falling prices, Spanish 12-month rate of inflation rose 0.4 percent in November.

Madrid – Spanish 12-month inflation rose 0.4 percent in November, official data showed on Friday, putting an end to eight consecutive months of falling prices that fuelled fears of deflation.

The rise, reported by the National Statistics Institute, compared to a drop in the European Union-harmonised consumer price index of 0.6 percent in October and of 1.0 percent in September.

The data confirms earlier figures issued by the institute on 27 November.

The 12-month rate of inflation had been negative since March when Spain became the first country in the eurozone to report an annual decline in consumer prices as a result of the global economic downturn.

The drop in prices raised concerns that Spain was entering a period of deflation, a downwards spiral in which consumers hold back on spending as they wait for even better deals and retailers cut prices in hopes of boosting sales.

But Spanish authorities have repeatedly downplayed the risk of deflation, arguing that the decline in prices largely reflected changes on the oil market.

The government had predicted that prices would once again start to rise at the end of the year leading the country to end 2009 with a positive inflation rate.

AFP / Expatica

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