Spain’s inflation rate fell to 0.7 per cent in February, the lowest rate since 1969 as retail businesses cut prices.

Spain sees lowest inflation in 40 years

The inflation rate dropped from 0.8 per cent in January as bars, restaurants, hotels and retail stores cut prices to attract customers.

Several analysts fear that if the current trend continues, the country could experience deflation. Deflation is widely defined as a prolonged bout of negative

Spanish gross domestic product contracted at a 0.7% yearly rate in the fourth quarter of last year, its first yearly drop since 1993. Most economists forecast GDP will fall even harder in the first quarter of this year.

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