Greek December consumer prices fall 1.7 pct, deflation eases

Greek consumer prices fell 1.7 percent in December, with the annual pace of deflation easing from the previous month when it set a record, data by the country’s statistics service showed on Monday.

Deflation hit its highest pace since monthly records began in 1960 in the previous month, registering -2.9 percent year-on-year.

The EU-harmonized deflation rate slowed to -1.8 percent from -2.9 percent in November. Economists polled by Reuters had forecast a rate of -2.5 percent in December.

A deep recession coupled with wage cuts and substantial spare capacity in the economy continue to exert downward price pressures, part of an internal devaluation process that could boost the Greek economy’s competitiveness.

Eurozone inflation fell in December to 0.8 percent, increasing the European Central Bank’s challenge of avoiding deflation.

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