Spain Deflation Lower Than Reported Earlier

April 11, 2014 Share Print 0

Spain’s statistics office says prices were 0.1 percent lower in March than the year before, slightly less than the previous estimate of 0.2 percent.

The figures released Friday by the National Statistics Institute may ease concerns that the country will suffer a prolonged bout of deflation, or falling prices. Deflation can weigh on growth by prompting consumers to delay purchases and businesses to refrain from investing.

Though price pressures are muted across the 18-country eurozone, they are still rising, albeit at only 0.5 percent in the year to April.

The European Central Bank is keeping a close watch on developments and may enact further stimulus measures if deflation across the eurozone becomes a real probability. Its target is to have inflation just below 2 percent across the eurozone.

via Kitco

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.