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INFLATION

Italy registers weak inflation for May

Inflation hit a four-year low in Germany and was weak in Spain and Italy as well, data showed on Friday, a week after the European Central Bank revealed a battery of measures to fight off the spectre of deflation.

Italy registers weak inflation for May
Photo: Flickr

Final data showed that using the ECB's methodology German inflation tumbled to just 0.6 percent in May from 1.1 percent in April, hitting the lowest level since February 2010.

Meanwhile in Spain consumer prices rose by just 0.2 percent in the year to May, the national statistics office INE said.

In Italy inflation slid by 0.1 point to 0.4 percent in May, Istat said.  

Finland's inflation rate came in at 1.0 percent.

Eurostat is to release its updated reading for May inflation on Monday, with the initial reading showing it had dipped by 0.2 points to 0.5 percent.

Inflation is currently unusually low across the 18-nation eurozone, fuelling concerns the region could be on the brink of deflation — a sustained and widespread drop in prices.

Spain, the eurozone's fourth largest economy, saw prices drop by 0.2 percent in March on an annual basis.

While falling prices may sound good for consumers, deflation is actually dangerous for the economy because it can trigger a vicious spiral where businesses and households delay purchases, thus throttling demand and causing companies to lay off workers.

Such concerns persuaded the European Central Bank to cut interest rates at its monthly policy meeting last week and launch a series of other measures to ease monetary conditions in the single currency area.

On Thursday, Portugal said its inflation was minus 0.3 percent in May, while Slovakia said prices were unchanged using its national methodology.

Ireland reported its inflation rate was steady at 0.4 percent in May using ECB methodology, France said its inflation rate stayed at 0.8 percent.

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ECONOMY

Spain’s inflation soars to 29-year high

Spanish inflation accelerated in November to its highest level in nearly three decades on the back of rising food and gas prices, official data showed Monday.

black friday spain
Black Friday sales can't disguise the fact for shoppers that life in Spain is getting increasingly expensive. Photo: GABRIEL BOUYS / AFP

Consumer prices jumped by 5.6 percent, up from a 5.4 percent increase in October, according to preliminary figures from national statistics institute.

That is its fastest pace since September 1992, when the rate was 5.8 percent.

The surge in inflation in the eurozone’s fourth-largest economy was due largely to a spike in food prices, followed by higher gas prices, the statistics office said.

Electricity costs, however, declined slightly after a month-long acceleration, it added.

As in other European Union nations, inflation in Spain has risen since the start of the year after consumer prices declined during most of 2020 due to the economic impact of pandemic lockdowns.

In October, eurozone inflation reached 4.1 percent, well above the European Central Bank’s target of two percent and equal to a high set in July 2008.

But the bank believes eurozone inflation will peak in November and is set to gradually slow next year as supply bottlenecks and the energy crunch ease, board member Isabel Schnabel said earlier this month.

Investors worry central banks will withdraw their stimulus measures sooner than expected to tame inflation.

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