1. Skip to content
  2. Skip to main menu
  3. Skip to more DW sites

Spain inflation alarmingly low

November 13, 2013

Official data from Spain has shown the country's inflation rate stands at zero, temporarily pleasing consumers, but worrying economists. They fear the trend might stifle nascent economic recovery in the months ahead.

https://p.dw.com/p/1AGip
Spaniards filling their supermarket trollies with food EPA/Manuel Rodriguez
Image: picture-alliance/dpa

Spanish inflation slowed to zero in October, the National Statistics Institute anounced Wednesday, presenting figures that harmonized with the European Union's own data.

It showed that the rise in consumer prices in the eurozone's fourth-biggest economy slowed by 0.5 percent from September.

The institute pointed out that the lower rate was primarily led by decreased prices on communications, transport, education, food and alcoholic beverages.

Counterproductive prices?

Economists warned that if the trend continued and prices started falling overall and in a lasting way, Spain's economy could spin into a vicious cycle of deflation, nipping the country's fragile recovery in the bud.

ECB in sudden rate cut

Research has shown that lower prices do not automatically fuel domestic consumption. On the contrary, they usually prompt consumers to put off planned purchases in the hope of seeing prices tumble further.

Spain last experienced deflation back in 2009, when prices fell for eight months in a row. The European Central Bank defines price stability as increases of just below, but close to 2 percent.

hg/mkg (dpa, AFP)