• Core inflation, the stable core of prices, decreases one tenth, to 1.6%

The Consumer Price Index (CPI) registered an inter-monthly increase of 0.3% in August, compared with 0.6% a year earlier. Consequently, the interannual rate has decreased three tenths percent, up to 1.5%, according to data published today by the National Institute of Statistics (INE). This moderation in the annual inflation rate is explained, to a large extent, by the prices of energy products and services.

The annual energy rate has decreased to -2.2% from -0.4% last July, due to the evolution of its main component, fuels and fuels. The annual rate of the latter has been reduced from 2.6% last July to -1.1% in August. The global decrease in the prices of energy products occurs despite the fact that the electricity rate has risen 3.3% last August and in the same month of 2012 did not change.

On the other hand, the annual rate of fresh food has increased by two tenths, up to 7.6%. This new rebound is due to the acceleration of the prices of fresh fruits and poultry and pork, whose annual rates have risen to 25.9%, 2.8% and 3.3%, respectively. On the other hand, the annual rate of the prices of the potato and its preparations has fallen by more than 6 percentage points, although it remains at high levels (31.2%).

Core inflation or stable price core has declined one tenth, to 1.6%, due to the moderation of inflation of services and, to a lesser extent, to processed foods. The annual rate of BINES (non-energy industrial goods) has increased by two tenths since July, to 0.4%. This is a result of the fact that the item of medicines and therapeutic material has increased by 1.5 points, up to 7.9%, and the price of cars, which has gone from -2.3% in July to -1, 8% in August.

On the other hand, processed food, beverages and tobacco reduce their annual rate slightly, from 3.4% in July to 3.3%. This modest deceleration responds, fundamentally, to the moderation of some food preparations and to the deceleration (seven tenths since July) of the prices of oils and fats. This rubric, with an annual rate of 23.2%, continues, however, to lead the inflationary tensions of this group. The services reduce their annual rate by two tenths, up to 1.7%, a drop that has mainly responded to the tourism and hospitality sector that has decreased its annual rate by two tenths, to 1%. The subclass of IPC other services has seen its rate cut from 13.6% to 5.7% in just one month.

The monthly increase in three tenths of the general index responds, especially, to energy products and fresh foods. The former increased 1.2%, due to the electricity tariff and fuels and fuels that increased 0.5%. Fresh foods rose 1%, due to the increase in fresh fruits (4.9%), sheep meat (2.6%) and poultry meat (1%). In the opposite direction, the decrease in clothing and footwear (-1.2%), fresh vegetables (-4.4%) and potatoes and their preparations (-2.2%).

The Autonomous Communities with the highest annual inflation rate in August were Murcia (2%), Cantabria (2%) and the Basque Country (1.9%). The least inflationary communities were Melilla (-0.2%), Canary Islands (0.3%) and Ceuta (0.8%).

In August, the annual rate of the CPI at constant taxes decreased three tenths, to -0.5%, and the underlying rate decreased by one tenth, to stand at -0.4%. In the constant tax index, the annual energy rate was -4.8% (-3.1% last month) and that of fresh food was 6.5% (6.3% in July). Within the core of inflation underlying constant taxes, BINES prices fell 1.8% (-1.9% in July), processed food rose 1.9% (1.8% last month) and service prices fell 0.3% (-0.1% in July).

The INE has also published the harmonized CPI (IPCA) for August, whose annual rate stands at 1.6%, 0.3 points below that of the previous month. If this data is compared with the annual rate estimated by Eurostat for the whole euro zone (1.3%), the differential unfavorable to Spain would remain at 0.3 points.

Ultimately, the moderation of global and underlying inflation continues and the trend is expected to continue in the coming months, due among other reasons to the discount of the successive price upward steps that fiscal consolidation measures generated in 2012. The consequent reduction in the inflation rate, together with the continuity in wage moderation, will give continuity to the recovery of a positive price growth differential against European trading partners, in particular, and to improve competitiveness in general . This is favoring the dynamism of exports already verified in the 2013 data and the recovery of production and employment.

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