• The containment of prices 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 an inter-monthly increase of 0.4% in April, compared to a significantly higher increase (1.4%) a year earlier. Consequently, the interannual rate has been reduced by one percentage point, up to 1.4%, according to data published today by the National Statistics Institute (INE). This intense moderation of 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 2.5% drop to which all its components have contributed. Fuel and fuel prices have moderated their annual rate by 2.6 percentage points, to -1.2%. There has also been an annual decrease of 6.5% in electricity. On the other hand, fresh foods have increased their annual rate by 0.2 percentage points to 2.7%, due to the acceleration of the prices of potatoes and fresh vegetables. On the contrary, mention the moderation of fresh fish and eggs.

Core inflation or stable price core has lowered its annual rate four tenths, to 1.9%, the first reduction so far this year. Highlights in this regard the moderation of services that reduced their annual rate by seven tenths, up to 1.7%, and processed food that reduced that rate by half a point, to 3.1%. The intense moderation of the services was due, to a large extent, to the tourism and hospitality item, whose annual rate was reduced by 1.4 percentage points, until there was no variation. This is due to the fact that Holy Week in 2012 was celebrated in April and in the current year, in March. There has also been a significant drop in the communications group, up to -4%.

The moderation of the annual rate of processed foods has been mainly due to tobacco that maintained its prices in April while in the same month of the previous year rose 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. On the other hand, the annual rate of the prices of BINES (non-energy industrial goods) increased by one tenth, up to 1.5%, due largely to the acceleration of clothing and footwear.

The monthly variation of the CPI has been 0.4%, lower than a year earlier (1.4%). The increase responds mainly to the item of clothing and footwear that has registered an increase of 10.1% with a high seasonal component. It has also influenced the fresh food that rises 0.7%, as a result of the increase in the price of potatoes (2.9%), fresh fruits (2.1%) and fresh vegetables (1.4%). On the contrary, it is worth mentioning a decrease of 2.7% in energy products, the result of 6.2% drops in electricity and 1.5% in fuels and fuels, as well as a significant decrease in communications (2.5 %).

The Autonomous Communities with the highest annual inflation rate in April were Cantabria (2.3%) Catalonia (1.8%) and Balearic Islands (1.7%). In the opposite direction, 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, to -0.6%, and the underlying one dropped four tenths, to -0.1%. Within this index, the annual energy rate was -5.1% and that of fresh food was 1.6%. Within the core of inflation underlying constant taxes, BINES 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 is 1.5%, 1.1 points below that of the previous month. When comparing with the annual rate estimated by Eurostat for the whole euro zone (1.2%), the unfavorable differential 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 bullish steps that took place a year earlier in tobacco and, especially, in the rubric of tourism and hospitality due to Holy Week, which last year was held in April and the current one in March.

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



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