Spain April Inflation Slows for First Month in Eight
Spain's inflation rate fell for the first time in eight months in April as slower growth eased pressure on prices.
Consumer prices gained 4.2 percent from a year ago using the European Union's calculation method, less than the 4.6 percent increase in March, the Madrid-based National Statistics Institute said in an e-mail today. Economists expected inflation to slow to 4.4 percent, according to the median of 10 estimates in a Bloomberg News survey.
“This is a result of the economic slowdown,'' Ivan Barbacid, a strategist at Barclays Fondos in Madrid, said. The difference between Spain's inflation and the euro-region average, which was 3.6 percent in March, “will narrow further, and if we have a very acute slowdown, it could close completely.''
Spain's economy will probably expand this year at the slowest pace since 1993, when the country suffered its last recession, as a 10-year construction boom ends and falling real estate prices weigh on consumer spending. The economy will expand 2.3 percent this year and next the government said last week, compared with 3.8 percent last year.
March retail sales slumped 5.5 percent on the year after adjusting for the number of days worked, a separate report said today http://us-fast-cash-now.com payday loans. Domestic demand growth will slow to 2.6 percent this year from 4.6 percent in 2007, the government forecast last week.
Sales Decline
Retail sales are dwindling across the euro region as rising food and energy prices leave consumers with less to spend. The Bloomberg European retail purchasing managers index fell the most in four years in April, according to a report published today.
The surge in oil and food prices is fueling inflation pressure across Europe even as economic growth wanes. The European Commission yesterday forecast inflation will average 3.2 percent across the euro region this year, that's 0.6 percentage points more than the commission's February estimate.
The price of crude oil has gained 24 percent this year and touched a record $119.93 a barrel in New York yesterday. Crude traded at $117.85 at 10:05 a.m. in Madrid.
The European Commission will publish April's initial estimate tomorrow. The 3.6 percent rate in March was the highest in the single currency's history.