Spanish inflation eases in February

30th March 2011, Comments 0 comments

Spain's annual inflation eased to 3.3 percent in March from a two-year high of 3.4 percent the previous month, official data showed Wednesday.

The National Statistics Institute (INE) gave few details in issuing its provisional estimate, but noted "an increase in prices for food and non-alcoholic drinks."

The INE is to issue its definitive figure for March on April 12.

Booming fuel prices helped to push Spain's annual inflation rate to 3.4 percent in February, the highest level since October 2008. Inflation was at 3.0 percent in January.

Prime Minister Jose Luis Rodriguez Zapatero acknowledged recently that the rising inflation rate was "worrying" but there was a "reasonable expectation" of a decline in the coming months.

However, oil prices have soared in recent weeks due to the wave of protest in the Arab world.

The Bank of Spain estimates inflation will stabilise at around 1.7 percent by the end of 2011.

The Spanish economy slumped into recession during the second half of 2008 as the global financial meltdown compounded the collapse of the once-booming property market.

The economy shrank 0.1 percent in 2010 and the unemployment rate ended the year at 20.33 percent, the highest level in the Organisation for Economic Cooperation and Development (OECD).

© 2011 AFP

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