January consumer prices fall 1.5 percent, deflation eases

Greek consumer prices fell 1.5 percent in January, with the annual pace of deflation easing from the previous month, data from the country’s statistics service showed on Friday.

Deflation hit its highest pace since monthly records began in 1960 in November last year, as prices fell 2.9 percent year-on-year.

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

Eurozone inflation slowed to 0.7 percent in January, well below the European Central Bank’s target of just under 2 percent, increasing its challenge of avoiding deflation. [Reuters]

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