Spain inflation rate falls to 13-month low in December

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Spain's annual inflation rate tumbled to a 13-month low in December as fuel prices eased, official preliminary data showed Friday.

Consumer prices rose 2.4 percent over the year to December compared to a rise of 2.9 percent in November, the National Statistics Institute said in a report.

It was the lowest inflation rate since November 2010.

"The result is principally because of a decline in the prices of fuels and lubricants and tobacco prices holding steady," the statistician said in a report based on early data.

Spain's central bank warned in a report Thursday that the economy, dragged down by global financial pressures and a 21.5-percent jobless rate, shrank in the final quarter of 2011.

Consumer spending showed "marked weakness", investment in equipment was lethargic, construction spending continued its decline, and foreign trade activity slowed, the Bank of Spain bank said.

Spain's new Economy Minister Luis de Guindos this week warned the economy would "surely see a downturn" in the final quarter of this year.

Many analysts expect economic activity to decline in the last quarter of 2011 and the first quarter of 2012. A recession is commonly defined as two quarters of contracting activity in a row.

© 2011 AFP

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