The Consumer Price Index (CPI) decreased 0.3% in July on a year-on-year basis, according to data published by the National Statistics Institute (INE). This reduction in the inflation rate has rested primarily on the most volatile components of the CPI: energy products and unprocessed food; processed food and services have also contributed to this moderation but have done so to a much lesser extent.
Non-Energy Industrial Assets (BINES) have slightly increased their interannual rate, although it is still in negative territory. In relation to the previous month, the general CPI has decreased 0.9% in July due to seasonal factors related to summer sales on clothing and footwear.
The annual rate of unprocessed food prices has decreased 1.4 percentage points in July, to -5.2%, a moderation that responds mainly to the evolution of various items such as fresh fruit, potatoes and sheepmeat and of bird. Its interannual rate has moderated significantly, especially in the first two, by discounting the strong rebounds recorded a year earlier. Fresh fruits have reduced their annual rate by 5.9 points and potatoes by 5.4 points, to -15.5% and -25.1%, respectively.
The prices of energy products have registered an interannual rate of 0.3% in July, 2.3 percentage points less than last June. This significant deceleration is due to a base effect of both fuels and fuels and the electricity tariff. The annual rate of this subclass has fallen from 7.1% in June to 3.8% in July, the result of a monthly fall of 1.9% in July of the current year and a 1.2% advance of one year before. Fuels and fuels, their main item, have moderated their annual variation rate by 2 percentage points, to -0.9%.
Core inflation remained at 0.0% in July for the third consecutive month. This stability has been due to the fact that the slight moderation of services and processed food has been fully compensated by the evolution in the opposite direction of the BINE.
The services moderated their annual inflation in July by one tenth, to 0.2%, largely due to the tourism and hospitality rubric that reduced their annual rate by three tenths, to 0.2%. This slowdown responded mainly to the organized trip subclass that reduced its annual rate from 1.2% in June to -1.5%. On the contrary, it is worth mentioning the acceleration of interurban public transport whose annual rate increased 1.5 percentage points, to 5.8%, as a result of a new increase in air transport (10.9%). BINES prices fell 0.4% in annual rate, one tenth less than the previous month.
Processed food, including beverages and tobacco, moderates its annual rate in July three tenths, to -0.1%. This slowdown is mainly explained by tobacco that reduces its annual rate by almost 2 percentage points, up to 1.2%. To a lesser extent the moderation of other items such as milk, sugar and mineral water, soft drinks and juices has influenced.
The CPI decreased 0.9% in July with respect to the previous month, which is explained by the lower prices of BINES and energy products, which was partially offset by the cost of services and fresh food, processed food It did not change. Fresh food increased 0.2% in the month due, mainly, to fresh fish that increased by 2.1%, sheep meat (0.7%) and fresh fruits (0.6%).
The services increased by 0.4% in monthly rate due mainly to tourism and hospitality (1.5%) and, within this heading, by organized travel items (8.7%) and hotels and other accommodations ( 8.3%); as well as by interurban public transport (2.2%), especially by air transport (4.6%). The prices of energy products decreased 0.6% in the month, due to the fall of 1.9% of the electricity tariff and 0.1% of fuels and fuels. BINES prices decreased 4% month-on-month, which mainly responded to clothing and footwear, which fell 12.9%, due to the effect of summer sales.
Of the 17 autonomous communities, four have registered in July a year-on-year inflation rate above the national average. The most inflationary have been: Balearic Islands (0.1%), Catalonia (0.0%), Basque Country (-0.1%) and Galicia (-0.2%). In Madrid, it has coincided with the national average (-0.3%) and the rest of the communities have rates below the national average: Extremadura and Navarra (-1%), Castilla-La Mancha (-0.8%), Murcia (-0.7%), Andalucía (-0.6%), Asturias, Cantabria and Castilla-León (-0.5%) and Aragón, Canarias, Comunidad Valenciana and La Rioja (-0.4%).
The annual rate of the CPI to constant taxes was -0.3% in July, as was the general CPI, four tenths lower than the previous month. The underlying constant tax has remained at 0.0%. The annual energy rate has stood at 0.3%, compared to 2.7% in June, and that of unprocessed foods at -5.2% (-3.8% in June) . Within the core of the inflation underlying constant taxes, BINES prices have stood at -0.4% year-on-year (-0.5% in June), processed food remained stable, compared to the rise in 0.1% of the previous month, and those of services increased 0.2%, one tenth less than in the previous month.
The INE has also published the harmonized CPI (CPI) for July, whose annual rate is -0.4%, four tenths lower than the previous month. If this data is compared with the annual rate estimated by Eurostat for the euro zone as a whole (0.4%), the inflation differential continues to be favorable to Spain, at 0.8 percentage points, three tenths more favorable than in the last month.
In summary, inflation has decreased in July due to the evolution of the prices of some of the most volatile items of the CPI, such as unprocessed food and energy prices, especially the electricity tariff. Therefore, this reduction is considered transitory, it being estimated that in the coming months a slightly positive sign will recover. This moderation of prices favorably affects the purchasing power of income and consumption. It also facilitates the continuity of wage moderation and competitiveness, with the consequent positive impact on exports, facilitating the continuity of the recovery of production and employment.
