• The underlying rate increases one tenth and reaches 2.2% for processed food
  • The prices of energy products fall 2.3 points, up to 5.3%, compared to a year ago

The Consumer Price Index (CPI) recorded an inter-monthly decline of 1.3% in January, compared to a somewhat lower fall (-1.1%) a year earlier, so that its annual rate decreased 2 tenths, to 2.7%, according to data published today by the National Institute of Statistics (INE).

The decline in annual inflation was mainly due to the moderation of the prices of energy products and non-energy industrial goods, especially the item of clothing and footwear, which more than offset the acceleration of food. For its part, the set of services maintained its annual rate.

Among the main components of the CPI, processed food grew 3.6% in annual rate, five tenths above December. The origin of this acceleration was mainly in tobacco, with an increase of 9.7% (3.7 percentage points above December) and in oils and fats, which raised its annual rate by 18%, two points percentage above December.

Meanwhile, non-energy industrial goods reduced their annual rate by two tenths, up to 1.3%. The decrease in clothing and footwear (from 0.3% in December to -0.1% in January) and medications in almost three points, up to 24.3%, stand out. The prices of the services maintained their annual rate at 2.2%, although variations of different signs are observed in many of its components. Noted for its magnitude the drop in communications that, due to the lower decline in telephone services, went from -2.7% to -1.8%. On the contrary, transport registered a cut of nine tenths, from 3.1% to 2.2%, which partly reflects the evolution of fuel prices.

Fresh foods increased again with intensity, in four tenths, up to 4.3%, due to the acceleration of the prices of fresh fruit, poultry, fresh fish and potatoes. The annual rate of energy products resumed in January the moderation of the last months of 2012, interrupted in December, and recorded a significant cut of 2.3 percentage points, up to 5.3%. This was partly contributed by the drop in electricity compared to the rise a year earlier. Its main item, fuels and fuels, moderated its annual rate by 1.5 percentage points, up to 4.2%.

The combination of these elements determined that core inflation (which excludes energy products and fresh food) will accelerate one point at an annual rate, up to 2.2%. The rebound in processed food overcame the slowdown of non-energy industrial goods and the annual rate of services remained constant.

The Autonomous Communities with the highest annual inflation rate in January were Cantabria (3.5%), Catalonia (3.3%) and Castilla y León (2.9%). The least inflationary were Melilla (1.1%), Ceuta (1.8%), Canarias (2.3%) and Madrid (2.4%).

The monthly variation of the CPI was -1.3%, which is mainly explained by non-energy industrial goods (-4.9%), influenced by the fall, seasonal, of clothing and footwear (14.7% ), as well as medicines (-1.2%). The second group with a negative impact were services (-0.3%), among which tourism and hospitality items (-1.3%) and the aforementioned communications (-1.2%) stand out.

Fresh food increased 0.7%, due to fresh fruits (2.7%), potatoes and their preparations (1.7%) and fresh fish (1.8%). In the opposite direction, the monthly fall of sheep meat (3.7%) and fresh vegetables (1.8%) stood out. Processed food also showed a monthly advance of 0.7%, as a result of the increase in the price of tobacco (3.5%) and the rise in oil prices (1.2%). Energy products rose 0.1% in the month, with clear differences between their components: while fuels and fuels registered a rise of 1.8%, electricity registered a decrease of 4.2%.

In January, the annual rate of the CPI at constant taxes decreased three tenths, to 0.6%, while the underlying rate remained at 0.2%. Within the underlying inflation the disparity of behaviors was also notable, with a drop in non-energy industrial goods (-0.8%), the practical stability of services (0.1%) and a higher rate for food elaborated (2%). Outside the core inflation block, the rate of fresh food (3.3%) was higher than that of energy products (2.4%).

The INE has also published the harmonized CPI (CPI) for January, whose annual rate stood at 2.8%, two tenths less than in the previous month. When compared with the annual rate estimated by Eurostat for the whole euro zone (2%), the differential unfavorable to Spain would remain at 0.8 points, for the third consecutive month. The HICP at constant taxes stood at 0.7%, two tenths less than in December.

In short, the year 2013 has begun with a tendency towards a gentle moderation of prices, similar to that of the last months of the previous year, which is expected to continue throughout the year. It is expected that the year will end at significantly lower inflation rates than the current ones. The continuity in the correction of prices, together with that of labor costs, will allow to expand the competitiveness improvements of the Spanish economy, with the consequent positive effect on investment and exports. Both are necessary elements for a recovery of the growth of our economy throughout the year.

Source of the new