• Core inflation, which excludes the most volatile CPI elements, remains at 1.4%
  • Summer sales, more intense than last year, contain the prices of non-energy industrial goods

The Consumer Price Index (CPI) increased 0.6% in August compared to the previous month, which increases the year-on-year rate to 2.7%, according to data published by the National Statistics Institute (INE). This rise of five tenths in the annual rate is mainly due to the evolution of the most volatile components of the CPI, that is, energy products and unprocessed food.

Energy products increase their annual rate to 11.9% (4.1 points more than in July) and fresh foods grow 2.7% (0.7 points more than a month earlier). The prices of services rise to a much lesser extent, just a tenth, up to 1.1% compared to a year ago. In the opposite direction, non-energy industrial goods evolve, reducing their annual inflation rate by three tenths, to 0.7%. More intense summer sales than in the previous season have largely contributed to this. For its part, processed foods maintain their annual rate at 3.2%.

Core inflation (which excludes energy products and fresh food) remains at 1.4%, as a result of the moderation in non-energy industrial prices, the slight rise in services and the practical stability of processed food.

The 0.6% rise in the monthly CPI rate is also explained by the notable growth in the prices of energy products (3% rise compared to July), especially fuel and fuel (4.2% rise) . The increase in food prices (0.4%) has also influenced, mainly due to fresh food (0.9%). On the other hand, services increased their prices by 0.6% in relation to July, which mainly responds to tourism and hospitality (1.4% increase in the month) and, to a lesser extent, to public transport (0, 2%).

In contrast, non-energy industrial goods reduced their prices by 0.5% compared to July. The decrease is especially noticeable in clothing and footwear (-1.1%) due to the fact that the summer sales have had a greater negative impact than last year in the same month of August (-0.2%).

The INE has also published the harmonized CPI (IPCA) for August, whose annual rate stands at 2.7%, half a point above that registered in the previous month. When compared to the estimated annual rate for the euro area as a whole, the differential would be unfavorable to Spain by one tenth, compared to -0.2 percentage points the previous month.

The evolution of prices in August reflects the impact of the most volatile elements, which has allowed structural inflation to remain stable. This element, together with the moderation in labor costs, allows us to maintain expectations of price developments in line with the current situation of the Spanish economy.



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