Prices in industrial countries fall

November 3, 2009
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, PARIS, Nov 3 – Consumer prices in leading industrialised countries fell by 0.3 percent in September over 12 months, the same fall as in August, the Organisation for Economic Cooperation and Development said on Tuesday.

On a monthly comparison of prices, the OECD said that there had been no change in September after a rise of 0.2 percent in August.

A persistent fall of prices amounts to deflation which can turn into a vicious cycle of falling prices, falling demand, rising unemployment and a further fall in prices.

Part of the purpose of massive support for economies by governments and central banks during the economic crisis, has been to avert deflation, as well as to stimulate activity.

The OECD, a policy forum and research base for the 30 leading industrialised economies, also said that prices in the eurozone fell by 0.3 percent in September after a fall of 0.2 percent in August on a 12-month comparison.

In the United States, prices fell by 1.3 percent in the year to September after a fall of 1.5 percent in August, and in Japan prices fell by 2.2 percent in September as in August, the OECD said.

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