• Electricity registers a 13% decrease in January in year-on-year terms
  • The underlying rate, which excludes the most volatile elements of the CPI, remains at 0.8%
  • The inflation differential with respect to the euro area is favorable to Spain by six tenths

The Consumer Price Index (CPI) increased in January 2018 by 0.6% year-on-year, according to figures published by the National Statistics Institute (INE), a rate one tenth higher than that advanced by the INE at the end of last month (0.5%) and half a point lower than that registered in December 2017 (1.1%). This evolution is explained by the year-on-year drop in the prices of energy products, after the increase in the previous month, and, to a lesser extent, by the slowdown in food prices, partially offset by the lower decrease in energy prices. non-energy industrial goods (BINE), while the prices of services kept their rate of increase constant. In month-on-month terms, the CPI registered a 1.1% drop in January 2018, compared to a 0.5% decrease in the same month of 2017.

The prices of energy products decreased in January 2018 by 1.7% year-on-year, after the 2.6% rise in December 2017, mainly due to the greater fall in electricity prices, which went from registering a rate from -0.2% year-on-year in December to -13% in January, and, to a lesser extent, to the slowdown in the prices of half-point fuels and lubricants, to 2.5%. For their part, gas prices increased their growth rate 1.4 points, to 8.2%.

Food inflation stood at 1.3% in January, four tenths lower than the previous month. The prices of unprocessed food grew 1.6%, 1.2 points less than the previous month, mainly due to the drop in the prices of fresh vegetables, of 3%, after the rise of 3.3 % in the previous month. The prices of processed food, beverages and tobacco slowed one tenth, to 1.1% year-on-year.

Core inflation (which excludes unprocessed food and energy products, the most volatile elements of the CPI) remained at 0.8% in January, for the third consecutive month, standing above headline inflation for the first time since November 2016. BINE prices fell 0.2%, one tenth less than in December, while processed food prices slowed down and service prices maintained a steady growth rate of 1.3% year-on-year.

In month-on-month terms, the CPI registered a variation rate of -1.1% in January 2018, six tenths lower than that registered in the same month of 2017. By component, the prices of energy products increased by 0 , 3%, compared to the 4.6% advance in January 2017; those of food increased 0.3%, four tenths less than in the same month of the previous year; and those of BINE and services fell one tenth less,
placing its month-on-month rates at -4.4% and -0.2%, respectively.

Within the food group, the prices of unprocessed food registered a month-on-month rate of 0.6% in January 2018 (1.8% in the same month of 2017), and those of processed foods increased by 0.2 %, just like a year earlier.

Inflation decreased in January compared to December in all the autonomous communities. The greatest decreases occurred in Cantabria (eight tenths, up to 0.4%) and Comunitat Valenciana (seven tenths, 0.4%). Catalonia (0.9%), Comunidad Foral de Navarra (0.3%) and Canarias (0.8%), are those that present a smaller decrease in their annual rate, of three tenths.

The interannual rate of the CPI for constant taxes stood at 0.6% in January, the same as that registered by the general CPI.

The INE has also published the harmonized CPI (HICP) corresponding to the month of January, whose interannual rate stands at 0.7%, five tenths lower than that of December. For its part, the rate advanced by Eurostat for the euro area as a whole in January is 1.3%, thus resulting in a favorable inflation differential for Spain compared to the euro area of ​​six tenths, four tenths higher than the month previous.



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