Italy at risk of 'deflationary spiral' says S&P - update 2

Danger of impact on consumer spending and investments

(ANSA) - Rome, October 23 - Italy is among a group of eurozone countries in danger of suffering a "deflationary spiral" that will hit prospects of economic recovery, ratings agency Standard & Poor's said in a report on Thursday. Italy went into deflation for the first time in decades in August, when the annual inflation rate was -0.1%, a figure that dropped to -0.2% in September. S&P said the low inflation or deflation registered in Belgium, Greece and Spain and Italy could "lead to a higher propensity to save" and hit consumer spending and investments.
    This would have an effect on prices, the agency said, "increasing the risk of a vicious deflationary spiral".
   

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