The consumer price index in Spain declined in September as expected, but this decline has raised further thoughts that Spain could be entering a spiral of deflation. The government says that it’s is confident that the country is not in an out of control deflation situation.

There is practically no inflation in Spain at the moment, a long period of price falls could spark deflation problems that would have serious financial repercussions for the country and business.

According to the latest consumer price index for the month of September, there was a 1% drop compared with the same month in 2008. There has been a drop every month since February this year, last months fall was around 0.8%.

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