Inflation in Spain ends last year at lowest level since 1961

Annual rise in consumer price index was only 0.3 percent

Inflation in Spain picked up slightly in December but ended the year at its lowest level since 1961, when the National Statistics Institute (INE) started to compile the current historical series.

The INE said the consumer price index climbed 0.1 percent from November, with the annual rate rising to 0.3 percent. The slight increase was the result of higher fuel prices for transportation and heating. Core, or underlying inflation, which factors out volatile energy and fresh-food prices, fell to 0.2 percent from 0.4 percent.

The harmonized index of consumer prices, which is used for comparative purposes with the rest of Europe, was also up an annual 0.3 percent. Inflation in the euro zone at the end of last year was estimated at 0.8 percent.

Inflation in Spain has traditionally outstripped that of the single-currency area, but growth in prices has been depressed this year by the longest recession in Spain since the transition from democracy, from which the economy only emerged in the third quarter.

The crisis has severely hit domestic demand due to high unemployment and falling wages.

The government recently passed legislation decoupling annual pension hikes from inflation, replacing it with an arrangement aimed at guaranteeing the sustainability of the system.

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