In September prices fell 0.1% for food and beverages year to year. This is good news, which consumers appreciate, and it strengthens the government's argument to freeze civil servant salaries.
The fear is that this will create deflation like in Greece, which could make consumer debt worse. In real terms, people would owe more and have to pay higher interest rates. Obviously, these effects would delay the recovery even more.
Analysts agree that the chances of deflation are low, especially because our dependence on foreign energy has an effect on prices. Still, the national government should watch the Consumer Price Index (CPI) closely since it is easier to control inflation than deflation. Japan was a good example of this.