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Spain's low inflation fuels eurozone deflation fears

AFP · 15 Jan 2014, 15:27

Published: 15 Jan 2014 15:27 GMT+01:00

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Consumer prices rose at an annual rate of 0.3 percent in the final month of the year, unchanged from the previous month, the National Statistics Insititute said, confirming an earlier estimate.

It was the lowest Spanish inflation rate for the month of December since records began in their existing form in 1961.

The European Central Bank's preferred inflation rate is around 2.0 percent.

Spanish prices were subdued even as the economy emerged slowly from a double-dip recession despite a 26-percent unemployment rate, registering 0.1 percent economic growth in the third quarter of 2013.

Economy Minister Luis de Guindos this week tipped economic growth of 0.3 percent in the final quarter of 2013.

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Analysts are divided over whether the eurozone faces a real threat of deflation, a general fall in prices that, once entrenched, can tip an economy into a downward spiral.

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