Share

Spain falls into deflation in March

|
Photo - A woman talks with her phone inside of a shop attacked by demonstrators during the second day of protests of students in Pamplona, northern Spain, Thursday, March 27, 2014. Hundreds of Spanish students took part in a general strike to protest government education reform and cutback plans. (AP Photo/Alvaro Barrientos)
A woman talks with her phone inside of a shop attacked by demonstrators during the second day of protests of students in Pamplona, northern Spain, Thursday, March 27, 2014. Hundreds of Spanish students took part in a general strike to protest government education reform and cutback plans. (AP Photo/Alvaro Barrientos)
News,Business

MADRID (AP) — Official data show Spain's inflation rate dipped into negative territory this month, a development likely to add pressure on the European Central Bank to ease its monetary policies.

The National Statistics Institute said Friday that consumer prices in the eurozone's fourth-largest economy fell 0.2 percent in March compared with a year earlier.

Falling prices, or deflation, can be a risk if they are protracted. Deflation can choke off growth as consumers and businesses delay purchases in hopes of getting better bargains down the line, and can be very difficult to get out of.

The ECB aims to keep inflation just below 2 percent, but the 18-country currency zone's rate was only 0.8 percent in February. Figures for March are due Monday, and the Spanish dip could contribute to a drop.

View article comments Leave a comment