Spain’s consumer price measure of inflation rose in July, official figures showed on Thursday, after the government raised the value added tax at the start of the month.

Consumer prices increased 1.9% year-on-year in July after rising 1.5% in the previous month, the Madrid based National Statistics Institute said. This was in line with analyst expectations. Core inflation, which exclude food and energy items, rose to 0.8% from 0.4%. The rise was mainly due to the government raising the VAT rate to 18% from 16% at the start of July, as it seeks to cut its ballooning budget deficit. Transport costs rose 6.2% from a year earlier in July, as car prices were higher than a year ago. Housing costs rose 4.3%, while food & non-alcoholic beverages prices were down 0.3%. Region-wise, consumer prices recorded the biggest rise in Catalonia. Significant price rises were also witnessed in the Basque Country, the Canary Islands, Cantabria and Murcia. On a monthly basis, consumer prices dropped 0.4% in July, also matching expectations. This followed a 0.2% increase in June. Clothing & footwear and household costs had the biggest negative influences on monthly inflation. This was somewhat offset by housing, leisure & culture, transport, and hotels, cafe & restaurants. Meanwhile, the harmonized index of consumer prices increased by 1.9% on a yearly basis, but fell 0.4% on a monthly basis, exactly in line with forecasts.

courtesy rttnews/Daily Times Pakistan