Greek consumer prices fall 1.1 pct in February, deflation eases

Greek consumer prices fell 1.1 in February, with the annual pace of deflation decelerating from the previous month, data by the country’s statistics service showed on Monday.

The figure came in below a forecast of -1.3 percent by economists in a Reuters poll. The EU-harmonized deflation rate slowed to -0.9 percent from -1.4 in January, below a -1.4 percent rate expected by economists.

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

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 was steady at 0.8 percent in February, well below the European Central Bank’s target of just under 2 percent, increasing its challenge of avoiding deflation. [Reuters]