Core inflation remains very stable at 1.0%. Looking ahead to the next few months, inflation is expected to begin to fall as of February, until rates are around 0.5%, although this evolution will be highly determined by the volatility of oil prices. In this context of very contained inflation and where the differential with Europe continues to be negative, this improvement in price competitiveness should be accompanied by an improvement in competitiveness-costs and measures that boost the growth of the productivity of the Spanish economy.

In January, the annual rate of the Consumer Price Index (CPI) accelerates three tenths to 1.1%. Despite this short-term upturn, it can be said that inflation remains at very contained levels, confirming the absence of inflationary pressures in the Spanish economy.

In this sense, core inflation also remains very moderate, registering the same annual rate as in the previous four months (1.0%). Analyzing its components, it is observed that all of them continue to show very moderate increases. Thus, service prices decrease their variation rate by two tenths, up to 1.4%, while processed foods, beverages and tobacco increase by one tenth, up to 0.9%, and industrial goods prices without energy products, they increase one tenth to 0.3%.

The prices of unprocessed foods increase their variation rate by six tenths and stand at 3.5%. Fresh and frozen fish is the rubric that has the greatest impact on this evolution, since its prices increase by 8.2%, although the biggest increase in the prices of pig meat, other meats and meat also influences this rise. Fresh fruits.

Energy prices in January moderate their rate of decline. Specifically, the interannual rate in this month of the prices of energy products has been 0.0%, compared to -2.1% in the previous month. This is due, in particular, to the increase in the prices of diesel, gasoline and other liquid fuels, while electricity and gas show significant interannual declines.

As for oil, in January the price of Brent crude fell to $ 64.4 / barrel, 6.7% lower than in December, although it was still 9.1% higher than a year ago. However, the price has seen a sharp decline in recent weeks due to lower demand in China, which is the world's largest claimant, and its measures to stop the spread of the coronavirus. In the first days of February, it has already been below 55 dollars / barrel, fearing that the growth of the Asian country and its effects on the world economy will suffer. For all this, and although OPEC + countries are evaluating the possibility of introducing additional cuts in production to contain the decline in the price of crude oil, the price of oil is expected to remain very contained in the coming months.

The Harmonized Consumer Price Index stood at 1.1% in January, three tenths more than in December, and the average Economic and Monetary Union index increased one tenth to 1.4%, according to the advanced indicator from Eurostat. Thus, the differential with the euro zone, although slightly cut, accumulates fifteen months in negative.

A significant moderation of inflation is expected in the coming months, reaching around 0.5%, maintaining a negative differential with the Euro Zone. In this context of improving price competitiveness, via inflation moderation, this should be accompanied by the containment of other costs (fiscal, labor …) and economic policy measures that favor the growth of the productivity of the Spanish economy .

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