Bloomberg News

Spanish Underlying Inflation Slows as Economy Contracts

February 15, 2012

Feb. 15 (Bloomberg) -- Spain’s underlying inflation rate slowed in January as the economy edged closer to a second recession in two years.

Core consumer prices, which exclude energy and fresh food, gained 1.3 percent from a year earlier, compared with 1.5 percent in December, the National Statistics Institute in Madrid said today. Headline inflation, based on European Union calculations, was 2 percent, matching an initial estimate on Jan. 31.

Spain’s economy may shrink 1.5 percent this year, the Bank of Spain estimates, as the government tightens its budget for the third year. The deepest credit squeeze on record and the 23 percent unemployment rate, the European Union’s highest, are also crimping household spending.

Spanish inflation, which outpaced the euro-region average for most of the past decade, is now lower than the European rate. Euro-region inflation was 2.7 percent in January, the European Union’s statistics office said on Feb. 1.

--Editors: Emma Ross-Thomas, Eddie Buckle

To contact the reporter on this story: Angeline Benoit in Madrid at

To contact the editor responsible for this story: Craig Stirling at

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