• The price suppression responds, above all, to energy products that fall 2.5%
  • Core inflation falls for the first time in the year, to 1.9%, thanks to the services sector

The Consumer Price Index (CPI) posted a 0.4% month-on-month increase in April, compared to a significantly larger increase (1.4%) a year earlier. Consequently, the year-on-year rate has decreased by one percentage point, to 1.4%, according to data published today by the National Statistics Institute (INE). This intense moderation in the annual inflation rate has been due to the prices of energy products and, to a lesser extent, to processed foods and services. Unprocessed food and non-energy industrial goods (BINES) slightly increased their respective annual rates.

The annual rate of energy products has moderated again in April by 5.7 percentage points, to record a fall of 2.5% to which all its components have contributed. Fuel and fuel prices have moderated their annual rate by 2.6 percentage points, down to -1.2%. There has also been a decrease of 6.5% per year in electrical energy. For its part, fresh foods have increased their annual rate by 0.2 percentage points to 2.7%, due to the acceleration in the prices of potatoes and fresh vegetables. Conversely, mention the moderation of fresh fish and eggs.

Core inflation or stable core prices has lowered its annual rate by four tenths, to 1.9%, the first reduction so far this year. In this regard, the moderation of services that reduced their annual rate by seven tenths, to 1.7%, and of processed food, which reduced this rate by half a point, to 3.1%, stand out. The intense moderation in services was due, to a large extent, to the heading of tourism and hospitality, whose annual rate decreased by 1.4 percentage points, until registering a null variation. This is due to the fact that Easter in 2012 was celebrated in April and in the current year, in March. There has also been a significant drop in the communications group, down to -4%.

The moderation in the annual rate of processed foods was mainly due to tobacco, which maintained its prices in April, while in the same month of the previous year it increased by 3.9%. Dairy products have also contributed. The main inflationary tensions in this group continue to be in oils and fats, which place their annual rate at 21.3%, almost two points above that of March. In contrast, the annual rate of BINES (non-energy industrial goods) prices increased by one tenth, to 1.5%, due largely to the acceleration of clothing and footwear.

The monthly change in the CPI was 0.4%, lower than that of a year earlier (1.4%). The increase mainly responds to the item of clothing and footwear, which has registered an increase of 10.1% with a high seasonal component. Fresh food has also had an influence, which rose by 0.7%, as a result of the increase in the cost of potatoes (2.9%), of fresh fruits (2.1%) and fresh vegetables (1.4%). On the contrary, it is worth mentioning a 2.7% decrease in energy products, as a result of declines of 6.2% in electrical energy and 1.5% in fuels and fuels, as well as a significant decrease in communications (2.5 %).

The Autonomous Communities with the highest year-on-year inflation rate in April were Cantabria (2.3%), Catalonia (1.8%) and the Balearic Islands (1.7%). In contrast, the least inflationary communities were Melilla (0.0%), Ceuta (0.5%) and the Canary Islands (0.9%).

In April, the annual rate of the CPI at constant taxes decreased one percentage point, down to -0.6%, and the underlying rate fell four tenths, down to -0.1%. Within this index, the annual rate of energy was -5.1% and that of fresh food, 1.6%. Within the core of inflation underlying constant taxes, BIN prices fell 0.7%, processed foods rose 1.7%, and services prices fell 0.3%.

The INE has also published the harmonized CPI (IPCA) for April, whose annual rate stands at 1.5%, 1.1 points below that of the previous month. When compared to the annual rate estimated by Eurostat for the euro area as a whole (1.2%), the differential unfavorable to Spain would decrease by six tenths to stand at 0.3 points.

In short, the evolution of prices in April has been characterized by moderation and has been in line with expectations. The intense reduction in inflation has been largely due to the good evolution of the prices of energy products and the discount of certain upward steps that took place a year earlier in tobacco and, especially, in the heading of tourism and hospitality due to to Easter, which last year was celebrated in April and this year in March.

For the next few months, this price moderation is expected to continue so that, together with the also expected income moderation, the competitiveness gains of the Spanish economy will be consolidated, with the consequent positive impact on the foreign sector.



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