• The decrease is due to the lower cost of non-energy industrial goods and the lower cost of energy products.
  • Core inflation also declines three tenths, thanks to the moderation of non-energy industrial goods

The Consumer Price Index (CPI) registered a month-on-month decrease of 0.5% in July, compared to a decrease of 0.2% a year earlier. Consequently, the year-on-year rate has decreased three tenths of a percentage point, to 1.8%, according to data published today by the National Statistics Institute (INE). This fall in the annual inflation rate is mainly explained by the lower cost of non-energy industrial goods (BINES), whose prices have registered a decrease in July of this year of much greater intensity than in the same month last year. A second contribution, of a lesser amount, comes from energy products, since this group registered a significantly lower rise in July this year than it had in the same month last year..

The annual rate of energy products has decreased to -0.4% from 1% last June, due to the evolution of its main item, fuels and fuels. That annual rate has decreased from 3.8% last June to 2.6% in July. This heading has also been influenced by the relatively more favorable behavior compared to last year of electricity and gas prices, which caused the heading of heating, lighting and water distribution to experience an annual decrease of -2.5% , when in June it was -0.4%.

For its part, the annual rate for fresh food has continued to increase by more than 2 percentage points, to 7.4%. This new rebound is due to the acceleration in the prices of potatoes and their preparations, and of fresh fruits, whose annual rates have increased to 37.3% and 22.2%, respectively. Conversely, it is worth mentioning fish whose annual rate shows a decrease of 0.7%.

Core inflation or stable price core has also decreased by three tenths, to 1.7%, which has responded exclusively to the moderation in BINES inflation, which has largely offset the increase in the annual rate of processed food. , given the stability of service inflation. The annual rate of the BINES has decreased since June by 1.3 percentage points, to 0.2%, as a result of the departure of medicines and therapeutic materials has fallen from 27.4% to 6.4%. This reduction responds to the discount of the bullish step that supposed the modification of the rules of the pharmaceutical copayment in July 2012.

On the other hand, the item of processed food, beverages and tobacco increases in annual rate from 3% in June to 3.4%. This acceleration is mainly due to the rise in the price of tobacco, which stands at an annual rate of 7.1% due to an increase in taxation, 2.6 percentage points more than in June, although oils and fats, with a Annual rate of 23.9% continue to concentrate the main inflationary tensions of this group. Services maintain their annual rate at 1.9%. Within this group, the annual rate of interurban public transport decreased by 2 percentage points, to 3.4%. Communications behaved in the opposite direction, whose annual rate went from -4% in the last month to -3.4% in July and to a lesser extent tourism and hospitality, with its annual rate rising by 1 tenth to 1, 2%. The most inflationary item was university education (22.3%), which practically maintained its rate as it had not yet discounted the 2012 step.

The monthly fall of the general index responds to BINES, which fell 4.1%, due to the item of clothing and footwear that decreased 12.6% due to the effect of the summer sales. To a lesser extent, the communications item contributed, which recorded a drop of 1.2%. On the contrary, it is worth mentioning the increase in fuels and fuels (2%), tourism and hotels (1.9%) – the latter two with a strong seasonal component – and unprocessed food (1.6%), as a result of the increases in fresh fruits (7.6%) and potatoes and preparations (3.9%).

The Autonomous Communities with the highest year-on-year inflation rate in July were Cantabria (2.6%), Murcia (2.3%) and the Basque Country (2.2%) and the least inflationary communities were Melilla (0.2%) , Canarias (0.6%) and Ceuta (0.9%).

In July the annual rate of the CPI at constant taxes decreased three tenths, down to -0.2%, and the underlying rate also decreased three tenths, down to -0.3%. In the constant tax index, the annual rate of energy was -3.1% (-1.8% last month) and that of fresh food was 6.3% (4.3% in June). Within the core of inflation underlying constant taxes, BIN prices fell 1.9% (-0.7% in June), processed foods rose 1.8% (1.7% last month) and the prices of services fell 0.1% (as in June).

The INE has also published the harmonized CPI (IPCA) for July, whose annual rate stands at 1.9%, 0.3 points below that of the previous month. If this data is compared with the annual rate estimated by Eurostat for the euro area as a whole (1.6%), the differential unfavorable to Spain would decrease by three tenths, to stand at 0.3 points.

In short, there is a drop in the monthly and annual rates of the price index, as well as in core inflation. It also improves the differential with the euro zone. Therefore, the discount of the successive upward price steps that the fiscal consolidation measures generated in 2012 began to take place and it is expected that this process will continue in the coming months. The consequent reduction in the inflation rate, together with the continuation of wage moderation, will give continuity to the recovery of competitiveness vis-à-vis our trading partners, favoring the dynamism of exports, and the recovery of production and employment.



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