Spanish inflation remains low in December as economy recovers

Wednesday 15 January 2014 10.24
Spanish consumer prices on a yearly basis rose by 0.3% in December
Spanish consumer prices on a yearly basis rose by 0.3% in December

Spanish consumer prices edged only slightly higher in December, official data showed today, as the spectre of deflation hovered over the euro zone.
 
Consumer prices rose at an annual rate of 0.3% 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%.

Spanish prices were subdued even as the economy emerged slowly from a double-dip recession despite a 26% unemployment rate, registering 0.1% 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. 

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.