Deflation persists for 25th month in a row

Greek consumer prices fell 2.1 percent year-on-year in March, with the annual pace of deflation slowing from a 2.2 percent decline in February, data from the country’s statistics service showed on Thursday.

Greece’s EU-harmonized deflation rate was steady compared to February, showing prices fell by 1.9 percent in March. Greek 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 25 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.

On an annual basis, consumer prices in the 19 countries sharing the euro fell 0.1 percent year-on-year in March.

The bottoming out of price declines is likely to be welcome news for the European Central Bank, which wants to keep inflation below but close to 2 percent over the medium term.

It started printing money in March to inject more cash into the economy and ward off concerns of persistently falling prices, or deflation.