Prices are rising at their slowest rate in four years in Spain, where the inflation figures for September show a 0.3 percent increase. It is now over a year since a new sales tax was introduced, which no longer figures in the annual calculation.
Weak domestic demand and modest energy hikes account for the low figure, while strong exports lead many to believe the third quarter will show economic expansion. Core inflation stripping out fuel and food prices now stands at 0.8 percent year-on-year. There are no signs domestic consumption is ready to reverse this deflationary trend.