Spain’s inflation rate dips into negative for February

SPAIN’s inflation rate has dipped into the negative this month, according to official data.

As the eurozone’s fouth largest economy, the recent drop is likely to put pressure on the European Central Bank to ease its monetary policies.

The National Statistics Institute said that consumer prices in Spain fell 0.2% this March, in comparison to the same time last year.

Deflation can prevent growth, as both consumers and businesses hold off on purchases in the hope of getting a better deal later on.

The resulting deflation cycle can be very difficult to get out of.

The ECB aims to keep inflation resting just below 2%, but the inflation rate was only 0.8% in February.

Figures for March are due on Monday, but the Spanish drop is likely to contribute to an overall dip.