Spain's latest consumer price index numbers were released yesterday by the National Statistics Institute, and inflation has risen by 0.2% year to year. The threat of deflation is shrinking even though many alarmist analysts think otherwise. The Spanish economy's situation is not comparable to what happened in Japan, where deflation rocked the island nation?s economy for 15 years.
The number is a double-edged sword. On the one hand, pensioners will see their spending power increase. On the other hand, the Social Security system's coffers will drain more quickly.
If could have been worse if inflation had been higher and if retirement checks were adjusted to compensate for that, which is just one more problem to consider as the Social Security system goes over budget again this year.
