Spanish consumer price inflation eases in June

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Spanish inflation eased to a still brisk 3.0 percent pace in June, official data showed on Thursday, in the midst of a cigarette price war and a cucumber crisis.

Consumer price inflation eased in June from 3.4 percent in May and a 30-month peak of 3.5 percent in April, the National Statistics Institute said in a preliminary etimate.

The report gave no detailed price breakdown, saying only that inflation eased because of "the behaviour of tobacco prices, food and non-alcoholic drinks".

Tobacco manufaturers have been cutting prices in recent weeks in a battle for smokers.

And prices for cucumbers and other vegetables plunged after Spanish-grown cucumbers were mistakenly blamed May 26 for a deadly outbreak of E. coli infection in Germany.

A definitive June inflation report is due July 13.

Despite the latest dip, Spanish inflation remains higher than the eurozone average of 2.7 percent in May.

Pounded by the double-punch of an international financial crisis and the bursting of a property bubble, Spain plunged into a recession in 2009 before stabilising last year.

The economy showed growth of 0.3 percent in the first quarter of this year, not enough however to prevent unemployment soaring to 21.29 percent -- the highest in the industrialised world.

© 2011 AFP

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