Spanish inflation still lower than Eurozone average
The Consumer Price Index (CPI) increased by 0.1 per cent year-on-year in July, according to figures published by the National Statistics Institute.
This rate is one-tenth higher than the figure advanced by the INE at the end of the previous month and matches the figure posted in June.
This stabilisation of inflation is due to the upward trend in prices of non-energy industrial goods (NEIG) and services, offset by the moderation in unprocessed foods and energy products.
In July, energy product prices were down by 5.8 per cent year-on-year, 0.1 points lower than last month’s figure.
This trend is due to two opposing effects: on the one hand the upward trend of electricity prices and, on the other, the greater drop in motor and heating fuel prices.
Electricity posted a monthly increase of 2.9 per cent, versus the 1.9% drop in the previous year, which gives a year-on-year increase of 5.1 points to 8.6 per cent. The annual rate of inflation of motor and heating fuels fell by 1.6 points to -10.7 per cent, due to falling of gas and fuel prices.
The year-on-year rate of change in unprocessed food prices has also dropped significantly, by 1.5 percentage points in July, to 1.7 per cent, mainly due to fresh fruits and pulses and fresh vegetables.
Core inflation (which excludes the most volatile components of the CPI, such as fresh food and energy) was up in July by two tenths to 0.8 per cent.
This rise can be explained by the upward trend in NEIG prices, which increased by an annual rate of one tenth to 0.4 per cent, and by the price of services, with an annual growth rate of 0.9%, two tenths higher than the previous month. The growth in service prices is due to tourism and the hotel and catering industry, up by an annual two tenths to 1.4 per cent.
The annual rate of inflation of processed foods, drinks and tobacco remains unchanged from the previous month at 1.2 per cent, due to the fact that the year-on-year four-point rise in oils was offset by the deceleration of tobacco and other items such as coffee, cocoa and infusions.
The annual rate of inflation increased in July in seven autonomous regions. In five, it increased above the national average: the Balearic Islands (0.6 per cent), Catalonia (0.4 per cent), the Region of Valencia (0.3 per cent), the Basque Country and La Rioja (0.2 per cent). Andalusia’s inflation was at a par with the national figure.
In the other autonomous regions, inflation was below the national average, with the greatest decreases being seen in Extremadura, Castile-La Mancha, the Canary Islands and Aragon, (-0.3 per cent). Meanwhile, the annual CPI rate at constant taxes in July stood at 0.1 per cent, the same as the general CPI.
Inflation in Spain continues to be lower than that of the Eurozone, with the consequent positive effect on the competitiveness of the Spanish economy, which will continue to benefit exports, production and employment.