Spain’s Inflation Slowed to 1.9% in May as Economy Contracted

Spanish inflation slowed in May as the euro area’s fourth-largest economy suffered its second recession since 2009.

Consumer prices, based on European Union calculations, rose 1.9 percent from a year earlier, compared with a 2 percent gain in April, the National Statistics Institute in Madrid said today. Economists had forecast a 2 percent increase in May, according to the median of seven predictions in a Bloomberg News survey.

Prime Minister Mariano Rajoy, in power since December, is cutting spending and raising taxes as he seeks to shave the budget deficit by 3.6 percent of gross domestic product. Spain’s unemployment is the highest in the 17-nation euro area at more than 24 percent and the Bank of Spain said yesterday that the economy continued to shrink in the second quarter.

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