• The slowdown in the CPI is mainly due to slower growth in fuel and electricity prices
  • Core inflation, which excludes the most volatile elements of the CPI, decreased one tenth, to stand at 0.9%

The Consumer Price Index (CPI) fell seven tenths in March, to 2.3% year-on-year, according to figures published by the National Statistics Institute (INE), a rate coinciding with that advanced by the INE at the end from last month. This behavior was mainly due to the lower growth in the prices of energy products and, to a lesser extent, to the slowdown in the prices of unprocessed food and services. In month-on-month terms, the general CPI stabilized in March (0.0%), compared to the 0.6% increase in the same month in 2016.

The prices of energy products grew 11.7% year-on-year in March, 5.1 points less than in February. This evolution is explained by the slower growth rate of fuel and lubricant prices, which went from 18.5% year-on-year in February to 12.8% in March, as well as by the slowdown in electricity prices, 6, 4 points up to 12.5%.

Food prices grew 1.4% compared to the same month in 2016, three tenths less than in February. Inflation of unprocessed food stood at 4.3%, 1.1 points below that of the previous month, largely due to the slowdown in the prices of fresh vegetables and pulses (15.4 points, up to 6.8%), partially offset by the higher growth of fresh fruit prices (from 7.6% in February to 10.3% in March). The prices of processed food, beverages and tobacco increased slightly in March, 0.1%, one tenth more than in February, highlighting the behavior of oils and fats, which slowed the rate of decline by 0.9 points, to 0 , 7%.

Core inflation (which excludes raw food and energy, which are the most volatile elements of the CPI) declined one tenth in March to 0.9%. This is mainly due to the slowdown in service prices, two tenths to 1.1%, especially highlighting the evolution of the prices of tourist packages, which went from growing 5.9% in February to 0.1% in March, explained in part to the different calendar of Easter – last year it was celebrated in March and this year it is celebrated in April. For their part, the prices of non-energy industrial goods (BINE) increased 0.6%, as in the previous month.

In month-on-month terms, the CPI stabilized in March, after the 0.6% increase registered in March 2016. By component, the prices of energy products fell by 2.6%, after the 1.8% rise in a year before; those of services grew 0.2%, two tenths less than in March 2016; those of the BINE increased 1.1%, as in March of last year; and those of food fell 0.3%, compared to the stabilization of March 2016. Within the food group, the prices of unprocessed food registered a month-on-month rate of -1.2% (-0.2% one year earlier), while those of processed foods rose 0.2% (0.1% in March 2016).

The annual rate of the CPI decreased in March in all the autonomous communities. The greatest decreases were registered in Extremadura and Murcia (one point in both cases, up to 1.9% and 2%, respectively), while the smallest drop in inflation corresponded to the Canary Islands (four tenths, down to 2.1 %).

The annual rate of the CPI for constant taxes stood at 2.3% in March, as did the general CPI.

The INE has also published the harmonized CPI (IPCA) corresponding to the month of March 2017, whose interannual variation rate stands at 2.1%, nine tenths lower than that of February. For its part, the harmonized CPI rate advanced by Eurostat for the euro area as a whole stood at 1.5% in March, five tenths below that of February, thus reducing the inflation differential for Spain by four tenths to the euro area, to stand at 0.6 percentage points.

Source of the new