Inflation falls below 2 percent for first time since August 2010

Inflation in Spain dipped below 2 percent in March for the first time in 19 months as the economy headed for a renewed recession.

According to a flash estimate released Thursday by the National Statistics Institute (INE), the consumer price index eased from 2.0 percent in February to 1.9 percent in March, the first time the figure had dipped below the European Central bank’s medium-term target for inflation since August 2010.

The INE said that the easing of inflationary pressure was “due principally to the performance of food and non-alcoholic drink prices.” The institute is due to provide a breakdown of the figures on April 13.

The harmonized index of consumer prices, which is used for comparative purposes with the rest of Europe, eased to 1.8 percent in March from 1.9 percent the previous month.

The decision to increase electricity rates by between 5 and 7 percent from April will put renewed upward pressure on inflation, while oil prices remain high.

Inflation will also be conditioned by any hikes on indirect taxes applied by the government as part of its austerity drive, although Prime Minister Mariano Rajoy has gone on record as saying