Spanish Consumer Prices Fell Most in Five Months in February

  • Guindos denies risk of deflationary spiral amid consumer surge
  • Spain decline reflects persistently low inflation in euro zone

Spanish consumer prices fell the most in five months in February, adding to concerns about persistently low inflation across the common currency bloc as the European Central Bank ponders more stimulus.

Consumer prices on an EU-harmonized basis fell 0.9 percent from a year earlier, the Madrid-basis National Statistics Office said Friday in a preliminary release. The five-month low decline was steeper than the median estimate of a Bloomberg News survey calling for a drop of 0.6 percent. On an monthly basis, consumer prices fell 0.4 percent.

Spain’s situation reflects the trends seen across the euro zone with a slump in oil and falling commodity prices driving persistently low inflation rates. With renewed concerns about global growth increasing, European Central Bank President Mario Draghi may announce a fresh round of stimulus to counter disinflationary pressures next month.

Spain’s national gauge of inflation showed prices from a year ago fell 0.8 percent, the most of in six months, confirming comments made by Acting Economy Minister Luis de Guindos earlier during a speech at the Group of 20 nations meeting in Shanghai. Despite the ongoing decline in consumer prices in Spain, De Guindos has repeatedly said there is no risk of a deflationary spiral taking hold in the Iberian nation, arguing instead lower prices will add to consumer spending power and boost consumption.

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