SPANISH consumer prices fell in December at their fastest rate since July 2009.
The lower prices – largely a result of cheaper oil globally – tempted Spaniards back into shops and pushed up retail sales for the Christmas season.
Statistics agency INE showed that prices for consumers were 1.1% lower this month compared to December 2013.
This represents a decrease for the sixth consecutive month, and shows a greater fall than expected due to the decreasing fuel prices.
Estefania Ponte, an analyst at Madrid-based broker Cortal Consors, said: “These figures clearly reflect the fall in oil prices which, from the point of view of the consumer, has given a little more disposable income, and Spaniards in general prefer to consume than to save.”
She added that Spain is unlikely, however, to enter a destructive deflationary spiral in which consumers delay their spending in the hope for further price falls in the near future.
“We don’t expect deflation in Spain,” she said.
INE also said that retail sales rose 1.9% in November, compared to November 2013, showing the strongest rise in a year.