Spain's Dec inflation at 2-year high

 

Spain's yearly inflation rate rose to the highest level in over two years in December, preliminary data showed Monday, in spite of weak economic growth.

Consumer prices increased by 2.9 % in December, driven by rising fuel and tobacco prices, the National Statistics Institute (INE) reported.

The rate rose significantly from a 2.2 % rate the previous month, meaning that Spanish inflation now stands at the highest level since October 2008.

Consumer prices in Spain have been rising steadily since November 2009 when the economy emerged from eight months of deflation.

Spain is already struggling with week economic growth, and suffering with government cut-backs with the intention of bringing public deficit under control and arresting market fears of a debt crisis similr to that seen in Greece.

growth was zero in the third quarter of the year, official data showed last week.

The Spanish economy, Europe's fifth-largest, slumped into recession in 2008 as the bubble burst on a decade-long property boom and amid the global financial meltdown.

The latest consumer price figures are based preliminary estimates. Definitive data will be released January 14.