Contrary to recent ill-informed suggestions on the forum that Spain does not recognize there is an economic crisis,
this report in El Pais is one of many reporting on the extent of the problem. Here, Tenerife is singled out as the region of Spain with the highest deflation, with the construction and tourist industries, 'the two driving forces of the island', in depression. With an unemployment rate of 26%, nobody is buying anything, and shops are offering huge discounts in an effort to get people spending in the run-up to Christmas. Hotels are also offering large discounts. The IPC (Consumer Price Index) fell 2% in October in Santa Cruz, the largest recorded drop in Spain.
The director of Mercadona in Tenerife has confirmed that their prices have on average fallen by 10% in the last year. (What is not said is that this is partly because a few expensive brands have been withdrawn, not that they are cheaper). Some workers have opted for a drop in salary rather than redundancy.
Some experts are denying there is deflation, for example José Manuel Soria, economic vice-president of the Canaries (well, he would, wouldn't he?) claiming this is just a temporary price drop before Christmas. Others, like the economist José Carlos Francisco claim there is open deflation and that the Canaries 'have lost half a decade of growth'.