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Spanish prices dropped for the eighth straight month in October, official data confirmed, falling at the slowest rate since April amid base effects from energy prices.

Spain's consumer price index fell 0.7 percent year on year in October in line with a Reuters poll and compared to a 1 percent slide in September and a record 1.4 percent drop in July.

Core inflation -- which strips out volatile elements of energy and food -- was 0.1 percent in October, the same as September, leading some economists to say risks of a self-perpetuating spiral of falling prices were declining.

'There's still a high risk core prices will peep into negative waters for a few months, but I've never backed the theory there will be a deflationary spiral in Spain,' said economist at 4Cast, Jose Garcia Zarate.

'Headline prices will turn positive in the next couple of months and there'll need to be a catastrophe for it to turn negative again.'

'We believe (the core rate) has practically stabilised and we don't expect further falls in the next few months,' the Economy Secretary Jose Manuel Campa said during a conference on the data.

'(Headline) prices are following a trend toward moderately positive levels which the government continues to forecast for the end of the year,' Campa said.

The data preceded euro zone final inflation on Nov. 16 which is expected to show consumer price inflation in the 16-member area on an annual basis was -0.1 percent in October.

Euro zone inflationary pressures eased in September, but deflationary concerns are beginning to fade across the region, The Economic Cycle Research Institute said.

Turbulent global energy markets have tipped consumer prices into negative territory across the euro zone this year, leading analysts to focus on core prices for an indication of how faltering economies are weighing on inflation.

Spain's crashing Spanish property market and plummeting consumer confidence has dropped core prices to historic lows, and many economists expect the figure to stay near zero, if not negative, through 2010.

Story from Forbes

Is any property below €50,000 a cheap Spanish property? Are cheap Spanish properties only to be found at auction or as bank repossessions? How much below market value does a Spanish property need to be to be considered cheap?