Greek deflation rate hits new high
Greece has lurched further into deflation, with prices tumbling at the fastest rate recorded as the country's long economic slump continues.
The Greek consumer prices index shrank by 2.9% in November, showing deflation accelerated after October's reading of minus 2.0%.
Prices in Greece have been falling steadily over the last three years, hitting deflation in April for the first time since records began in the 1960s.
This graph tracks Greek CPI (red) against eurozone inflation (blue):
Today's data shows that some retailers have slashed prices drastically, having seen demand slide among customers buffeted by austerity cutbacks and record unemployment.
Clothing and textile prices tumbled by over 11%, according to national statistics body ELSTAT. Household equipment costs were down 3.7% year-on-year, as this chart shows:
Greece's austerity programme has forced wages and pensions down in an attempt to boost competitiveness -- so deflation has not come as a surprise. It could even be taken as a sign that the Troika's plan is having its intended effect.
The damage wrecked on the wider Greek economy rather undermines the argument that deflation's a good thing, though, especially as Athens isn't able to inflate away some of its national debt.
We've also heard confirmation this morning that the Greek economy shank by 3% on a year-on-year basis in Q3, which confirms that the five-year recession is easing.
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