In February, the annual rate of inflation in the eurozone clocked in at an average of 0.7% but Portugal was one of four members which have fallen into deflation.
The annual rate in Portugal was -0.1%, the same rate as in Slovakia. Greece and Cyprus were harder hit, with -0.9% and -1.3% respectively.
The situation could make it more difficult for the government to reduce its debts.
Deflation in Japan, with consumers waiting for lower prices before spending, lead to two decades of economic stagnation. The European Central Bank has rejected comparisons with Japan’s experience.
The next G7 meeting will be in Tokyo. Eurozone officials attending will be expected to explain what they have done so far to deal with their problems.
The last time annual inflation dropped to 0.7% was last October. That prompted the European Central Bank to slash its interest rate to a record low of 0.25%. The ECB inflation target remains at close to but below 2%.
Prices of food, alcohol and tobacco fell on average 0.1%, while energy costs rose by 0.1%.
Comments
More relevant is that consequential to this inability of the elite to act will be that everyday staples of life like food and utilities are inflating.
'Nada boa' as all great Portuguese sages used to say over the centuries.