Spanish inflation picks up speed in April: official data

29th April 2010, Comments 0 comments

Spanish 12-month inflation in March rose to 1.6 percent from 1.5 percent in March, preliminary data from the national statistics institute INE showed Thursday.

It will provide a full breakdown of the inflation data when it publishes final figures for the month on May 14.

Spanish 12-month inflation rose 0.9 percent in February, 1.1 percent in January, 0.9 percent in December and 0.4 percent in November, putting an end to eight consecutive months of falling prices that fueled deflation fears.

The government has repeatedly downplayed the risk 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, arguing the arguing that the decline in prices largely reflected changes on the oil market.

While the statistics office did not give a breakdown for inflation in April, it said higher fuel prices played a role in the rise on prices.

Spanish inflation will average around 1.0 percent this year after a rise of two percentage points in the value-added tax in July, the Bank of Spain said Tuesday in its latest bulletin.

Spain has been mired in its worst recession in decades since the end of 2008 when the global credit crunch hastened a correction that was already underway in its key property sector.

© 2010 AFP

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