- The average annual CPI rate stood at -0.2%, which has allowed gains in purchasing power
- Core inflation ends the year at 1% due to acceleration in service prices
The Consumer Price Index (CPI) increased 1.6% year-on-year in December, nine tenths more than in November, according to figures published by the National Statistics Institute (INE). This is a tenth above the data advanced by the INE two weeks ago. This acceleration is mainly explained by the evolution of the prices of energy products and, in particular, of fuels and fuels. Throughout 2016, average inflation has returned to be negative for the third consecutive year (-0.2%), which has allowed new gains in purchasing power of wages and pensions.
The prices of energy products grew 5.3% year-on-year in December, after the 0.5% decrease registered in November. This evolution is mainly explained by the behavior of the heading of fuels and fuels, whose prices accelerated seven points, from -1% to 6% and, to a lesser extent, by electricity prices, which increased by 3 , 1 points its growth rate, up to 3.7%.
Food inflation stood at 0.8% in December, four tenths above that of the previous month, due to the acceleration in the prices of unprocessed food, one and a half points to 2.1%. This evolution responds, mainly, to the increase in the prices of fresh vegetables, which have gone from falling 1.1% in November to increasing 7.7% in December. Processed food prices slowed slightly, one tenth to 0.2% year-on-year.
Core inflation (which excludes unprocessed food and energy, which are the most volatile elements of the CPI) increased two tenths in December, to 1%, due to the acceleration in service prices, four tenths to 1, 6%. The prices of processed foods increased with less intensity (0.2%, compared to 0.3% in November), while those of non-energy industrial goods (BINE) maintained the annual growth rate at 0.6 % of the previous two months.
In month-on-month terms, the CPI increased 0.6% in December, compared to the decrease of 0.3% in the same month of 2015. By component, the prices of energy products rose 3.6%, after the decrease of 2 , 2% from a year before; those of services increased 0.6%, three tenths more than in the same month of 2015; those of the BINE fell 0.6%, the same as in December of the previous year; and those of food increased 0.4%, compared to the stabilization of a year earlier.
Within the food group, the prices of unprocessed food registered a month-on-month rate of 1.4% in December 2016, one and a half points higher than that of the same month in 2015, while those of processed foods stabilized, compared to the 0.1% rise a year earlier. Of note, within unprocessed food, the notable increase in the prices of fresh vegetables, 7.4% month-on-month, after the 1.4% decrease in December 2015.
The interannual rate of the CPI increased in December 2016 in all the autonomous communities. The highest increases were registered in Castilla-La Mancha (1.1 points, up to 1.6%), La Rioja (1.1 points, up to 1.5%) and the Region of Murcia (also 1.1 points , up to 1.6%). The smallest increase, of five tenths, corresponded to the Canary Islands, with inflation of 1.3%.
The INE has also published the harmonized CPI (IPCA) for the month of December, whose annual variation rate stands at 1.4%, nine tenths higher than in November. This rate is three tenths higher than that advanced by Eurostat for the euro area (1.1%, compared to 0.6% the previous month), resulting in an inflation differential unfavorable to Spain with respect to the euro area of three tenths, after the favorable differential of a tenth of November.
In summary, the year-on-year CPI rate stood at 1.6% in December, nine tenths above that of the previous month, an acceleration that is largely explained by the evolution of the prices of energy products and, in particular , of fuels and fuels. 2016 closed with a negative average annual CPI rate of -0.2%, which has allowed gains in the purchasing power of wages and pensions for the third consecutive year.
