ECONOMY

Greek deflation slows in February, prices drop for 24th month

Greek consumer prices fell 2.2 percent year-on-year in February, with the annual pace of deflation slowing from a 2.8 percent decline in January, data from the country’s statistics service showed on Tuesday.

Greece’s EU-harmonized deflation rate also decelerated, showing prices fell by 1.9 percent in February, with the reading slower than an average forecast of a 2.6 percent drop in prices by economists polled by Reuters.

Greece’s consumer prices fell by an average 1.3 percent in 2014 compared to a year earlier.

For years an inflation outlier in the eurozone, Greece has been in deflation mode for the last 24 months as cuts in wages and pensions and a deep recession exerted downward pressures.

Deflation in Greece hit its highest level in November 2013, with consumer prices registering a 2.9 percent year-on-year decline.

Eurozone inflation turned negative in December for the first time since 2009 following a steep drop in global oil prices and fell further in January with ECB President Mario Draghi warning it was likely to be low or negative for months.

On an annual basis, prices in the 19 countries using the single currency were 0.3 percent lower in February than a year earlier.

The European Central Bank has convinced slightly more than half of 83 economists polled by Reuters that its money printing program, which starts in March, will be successful in bringing eurozone inflation back up to target.

[Reuters]