Deflation looms over Eurozone

Belgian consumer prices fell in May from April, by 0.37 per cent, for the first time since December 1960. The drop was largely the result of a 17.7 per cent fall in electricity, gas, heating fuel and petrol prices, Belgian media reported.
Germany’s European harmonised index fell by 0.1 per cent, the country’s statistical office said on Wednesday. Deflation has already hit Spain, Ireland and Portugal, three of the European countries most affected by the economic slowdown.
Economists now expect average consumer prices in the 16-member eurozone as a whole to fall in June, adding to the difficulties that the European Central Bank is experiencing as it tries to deal with Europe’s worst recession in many decades.