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Spanish Nov inflation dips to 15-month low 2.4 pct

Published 12/12/2008, 03:47 AM
Updated 12/12/2008, 03:50 AM

MADRID, Dec 12 (Reuters) - Spanish inflation dipped to a 15-month low of 2.4 percent in November, final government data showed on Friday, as easing energy prices and a slowing economy put the brakes on prices.

Inflation dipped from 3.6 percent in October and was down from a high of 5.3 percent in July, just before the global financial crisis knocked the wind out of rampaging oil prices.

"We expect Spanish inflation to slip to 0.6 percent by the third quarter of next year," said Philippe Sabuco of BNP Paribas.

November's data was in line with analysts' expectations. Prices fell by 0.4 percent during the month of November.

Harmonised data according to European standards showed the same annual and monthly rates of inflation, while core inflation was 2.7 percent in November.

"We expect core inflation to remain above the headline figure - at 1.8 percent in the same period. This is because falling energy and food prices will continue to be key factors," said Sabuco.

Spanish retailers have been discounting heavily to offset falling sales as the economy contracts.

Gross domestic product contracted by 0.2 percent in the third quarter and the International Monetary Fund has warned the country might face a long period of stagnation without structural reform now that a debt-fuelled construction boom has collapsed. (Reporting by Paul Day and Sarah Morris; writing by Jason Webb; editing by Tony Austin)

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