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Spain staring down a deflationary gun barrel

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Spain staring down a deflationary gun barrel

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Spanish consumer prices have fallen by 1.1 percent in December making it a sixth straight month of declining prices.

Madrid expects the trend to continue.

The announcement adds to ECB fears that eurozone countries are heading towards the deflationary trap of falling prices, wages and consumption, which would further add to Spain’s economic woes and the wider eurozone.

Spain is the fourth largest economy in the eurozone and has been struggling to extricate itself from six years of economic turbulence.