Greek deflation at record and could threaten future recovery from recession - economy |
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Greece's severe recession continues to dissuade people from spending money, further dragging down...
euronews, the most watched news channel in Europe Subscribe for your daily dose of international news, curated and explained:http://eurone.ws/10ZCK4a Euronews is available in 13 other languages: http://eurone.ws/17moBCU http://www.euronews.com/2013/12/09/greek-deflation-at-record-and-could-threaten-future-recovery-from-recession Greece's severe recession continues to dissuade people from spending money, further dragging down consumer prices. In November inflation fell 2.9 percent from the same month last year - worse than October's 2.0 percent drop. That is the deepest deflation on record and could make life more difficult for the Athens government. The Organisation for Economic Cooperation and Development recently warned that a faster-than-expected fall in prices could hurt economic growth, increase Greece's debt-to-GDP ratio and upset the economic projections underpinning its huge EU-IMF bailout. Price falls come amid record unemployment and wage cuts. Initially they were welcomed by the European Union and the International Monetary Fund as a way to make companies more competitive abroad and protect Greek consumers whose incomes have been sharply squeezed. But now they are a potential problem. "This is unprecedented for Greece," Nikos Magginas, an economist at National Bank of Greece said. "A protracted period of general price falls would deteriorate the country's debt dynamics", he added. Find us on: Youtube http://bit.ly/zr3upY Facebook http://www.facebook.com/euronews.fans Twitter http://twitter.com/euronews |