Spanish inflation falls for second consecutive month

1st May 2009, Comments 0 comments

Consumer prices fell 0.1 percent in April compared with a year earlier and follows a 0.1 percent decline in March, said the National Statistics Institute (INE).

MADRID – Spain recorded its second consecutive monthly decline in inflation in April as it struggles with a recession which has led to a sharp decline in consumer demand, official data showed Thursday.

Consumer prices fell 0.1 percent in April compared with a year earlier, the National Statistics Institute (INE) said.

It follows a 0.1 percent decline in March, which was the first annual drop in prices since INE started tracking inflation in 1961.

The annual inflation rate has fallen each month after hitting 5.3 percent in July, which was the highest level since January 1997. It rose 0.7 percent in February.

The government however has dismissed the risk of deflation, characterised by a prolonged period of falling prices and which leads consumers and companies to hold back on spending as they wait for even cheaper prices.

Following Thursday's preliminary data, the INE will publish final inflation figures for the month on 13 May.

Spain's economy, the fifth largest in Europe, entered recession at the end of last year as the international financial crisis hit an already weakened building sector which had been the country's engine of growth.

The unemployment rate soared to over 17 percent in the first quarter of 2009 from almost 14 percent in the previous quarter, its highest level since 1998 and double the average in the 27-nation European Union.

AFP / Expatica

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