Spanish May Core Inflation Rate Holds at Lowest Since 2010

Spain’s core inflation rate remained at the lowest since 2010 amid a deepening recession as the government stepped up austerity measures to try to retain access to financial markets.

Core consumer prices, which exclude energy and fresh food, rose 1.1 percent from a year earlier, matching the April rate, the National Statistics Institute in Madrid said today. The figure was in line with the median forecast of five economists surveyed by Bloomberg News. Headline inflation, based on European Union calculations, was 1.9 percent, matching an initial estimate on May 30.

The fourth euro-region member to seek a bailout since June 9, Spain is cutting spending and raising taxes to shrink the budget deficit by 40 percent this year. The unemployment rate has risen to 24.3 percent, the highest in the euro zone, as the recession deepened in the second quarter.

To contact the reporter on this story: Angeline Benoit in Madrid at abenoit4@bloomberg.net

To contact the editor responsible for this story: Craig Stirling at cstirling1@bloomberg.net

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