The consumer price index, CPI, stood at the month of August in a -0.8% thus joining the 6 consecutive months of negative data. This figure is an upward variation of about 6 tenths data for July. Thus these six months of negative data, Spain comes into deflation, a fact that occurs when two quarters of data accumulating effects. A situation that was not repeated in Spain since 1961 and is calculated using the same statistical procedures for calculating the HICP. While final data will be known in September, it must be remembered that the phenomenon of deflation is caused by a general fall in prices. In the case of Spain, an economy that lacks solvency to consume, this slowdown will certainly influence in the

purchasing power of consumers. While falling prices that benefit consumers who will pay less for their goods and services, this fabric is offset by the labor and business who are facing a critical situation caused by a complete lack of demand and general price decline, thus profits margins will be drastically reduced. This situation coupled with lack of access to credit and late payments of invoices, carry a large number of companies to put up the shutters, causing further layoffs and increasing unemployment rate that some experts place already, at 25% before year end.