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Inflation falls in all regions during December 

PAGE 17 Inflation falls in all  regions during December
Spanish inflation has slowed to 1.1% due to decelerating energy prices

According to figures published by the Spanish National Statistics Institute (INE), the Consumer Price Index (CPI) increased in December 2017 by 1.1% year-on-year, 0.1% less than the rate announced by the INE at the end of last month (1.2%) and 0.6% lower than the figure posted in November (1.7%).

This trend can be mainly explained by the deceleration of energy product prices and, to a lesser extent, the deceleration of unprocessed food and service prices. In month-on-month terms, the CPI was unchanged in December 2017, compared with the 0.6% growth recorded in the same month of 2016.

Energy product prices increased by 2.6% year-on-year in December 2017, 3.4 points less than in November. This was mainly due to the deceleration of liquid fuel and lubricant prices. Whereas these posted a year-on-year rate of 6.7% in November, this figure fell to 3% in December. To a lesser extent, it can also be explained by the fall in electricity prices (down 0.2%) following an increase of 3.5% in November. In turn, the increase in gas prices slowed by 0.3% to 6.8%.

Food inflation stood at 1.7% in December, 0.5% lower than in the previous month. Unprocessed food prices rose by 2.8%, 1.5 points lower than in the previous month. This was due to the deceleration of fresh fruit prices (down 3.9 points to 4.1%) and fresh legume and vegetable prices (from 7.5% growth in November to 3.3% growth in December). Processed food, drink and tobacco inflation remained at 1.2%.

Core inflation (which excludes the most volatile elements of CPI, unprocessed food and energy products) remained at 0.8% in December. Service prices eased by 0.2% to 1.3% year-on-year as a result of tourism and hospitality, more specifically, package tours, which fell by 1.2% in December whereas they rose by 5.8% in November. In turn, the year-on-year variation in the price of non-energy industrial goods (NEIG) remained steady at -0.3%.

In month-on-month terms, the CPI was unchanged in December 2017. This is 0.6% lower than in the same month of 2016. Broken down by components, energy product prices rose by 0.3% (compared with an increase of 3.6% in December 2016); food prices remained stable (compared with an increase of 0.4% in the same month of 2016); service prices rose by 0.4% (0.2% less than in the same period of the previous year); and NEIG prices fell by 0.6% (as they did in December 2016).

In the food category, unprocessed food prices in December 2017 recorded a month-on-month change of -0.2% (1.4% in the same month of 2016) while processed food prices remained stable (as was the case a year ago).

When compared with November, the rate of inflation fell in December in all autonomous regions. The largest decreases were posted in La Rioja (0.6%), Aragon (0.9%), Castile-Leon (1%) and Catalonia (1.2%), with decreases of 0.8% in the first and 0.7% in the others. The Region of Madrid (1.2%) posted the lowest decrease in its year-on-year rate, down by 0.3%.