Greece slips back into deflation

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After a brief flirtation with positive inflation n February, Greece has defied economists’ forecasts and slumped back into deflation.

Consumer prices contracted 0.7 per cent year-on-year in March on an EU harmonised basis, a stark contrast to the 0.2 per cent rise forecast by economists, and the 0.1 per cent rise seen in February.

Using Greek measures, consumer prices contracted 1.5 per cent year-on-year in March, the worst contraction since September. By this measure, Greece slipped into deflation in early 2013, and has been firmly stuck there ever since.

Charts courtesy of Bloomberg

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