Spanish inflation eases in June

29th June 2010, Comments 0 comments

Spanish 12-month inflation eased for the first time for four months in June, falling to 1.5 percent from 1.8 percent in May, official data showed Tuesday.

The inflation rate had been rising steadily since late 2009 except for temporary dip in February.

In November, inflation was just 0.4 percent after a period of eight months of declines amid the country's deep recession.

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

The National Statistics Institute (INE) did not give not give a detailed breakdown of the figures for June, but said that fuel costs had fallen while food prices rose.

The INE figures, calculated on the European Union harmonised method, are preliminary and the institute will issue a definitive figure for May on July 13.

Last month, Spain became the last of Europe's big economies to emerge from recession, with official data showing fragile growth of 0.1 percent in the first quarter.

The country slipped went into recession at the end of 2008 as the global financial meltdown compounded a crisis in the Spanish property market, which had been a major driver for growth in the preceding years.

The recession sent the unemployment rate soaring to more than 20 percent in the first quarter.

The socialist government this year launched tough austerity measures aimed at shoring up Spain's public finances amid concerns it could follow Greece into a financial crisis.

© 2010 AFP

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