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Spanish inflation leaps to two year high

MADRID, Jan 3, 2011 – Spain\’s annual inflation rate leapt to the highest level in more than two years in December, preliminary data showed Monday, despite feeble economic growth.

Consumer prices climbed at an annual pace of 2.9 percent in December, propelled by higher fuel and tobacco costs, the National Statistics Institute data showed.

Rising sharply from a 2.2-percent rate in November, Spanish inflation is now at the highest level since October 2008.

Consumer prices in Spain have been rising steadily since November 2009 when the economy emerged from about eight months of deflation.

Spain is already struggling with feeble economic growth, squeezed by government cut-backs aimed at reining in a huge public deficit and arresting market fears of a Greek-style debt crisis.

Economic growth was zero in the third quarter of the year, official data showed Thursday.

The Spanish economy, Europe\’s fifth-largest, slumped into recession in 2008 as the bubble burst on a decade-long property boom and amid the global financial meltdown.

The latest consumer price figures are based preliminary estimates. Definitive data will be released January 14.

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