• The acceleration of the CPI in services and unprocessed food compensates the lower rates in processed foods and energy
  • The inflation differential favorable to Spain with respect to the euro area widens to 0.1 percentage points

The Consumer Price Index (CPI) increased by 0.7% in the interannual rate in November, the same as in October, according to figures published by the National Statistics Institute (INE). This rate coincides with that advanced by the INE at the end of last month. The stability in the annual rate of the CPI is due to the fact that the acceleration in the prices of services and unprocessed food compensated for the slowdown in processed food and energy, while the inflation of non-energy industrial goods (BINE) stabilized. The average annual rate stood at -0.4% in November. In month-on-month terms, the general CPI increased 0.4%, a rate identical to that of the same month in 2015.

The prices of energy products fell by 0.5% year-on-year in November, compared to the practical stabilization registered in October (0.1%). This evolution is mainly explained by fuels and lubricants, which slowed 1.2 points, to 0.2%, and, to a lesser extent, by electricity, which slowed three tenths, to 0.6% .

Food inflation stood at 0.4% in November, one tenth higher than the previous month, due to the acceleration in the prices of unprocessed food, the rate of which increased four tenths, to stand at 0 , 6%. This evolution responds, mainly, to the prices of fresh vegetables, which moderated their fall more than four points, to 1.1%. The prices of processed food slowed one tenth, to 0.3% year-on-year.

Core inflation (which excludes unprocessed food and energy, which are the most volatile elements of the CPI) remained at 0.8% in November, due to the slight acceleration in service prices of one tenth, up to 1.2%, offset the slowdown of the same magnitude in the prices of processed foods (up to 0.3%), while the BINE maintained its annual growth rate at 0.6%.

In month-on-month terms, the CPI grew 0.4% in November, the same as in the same month of 2015. By component, the prices of energy products remained stable, after the 0.7% increase a year earlier; services decreased 0.1%, compared to the 0.2% drop in the same month of 2015; those of the BINE increased by 1.5%, the same as in November of last year; and those for food fell 0.1%, one tenth less than a year earlier.

Within the food group, the prices of unprocessed food registered a month-on-month rate of -0.4% in November, four tenths higher than that of the same month in 2015, while those of processed foods stabilized, compared to the 0.1% rise from a year earlier. Within unprocessed food, the prices of fresh vegetables decreased by 0.3%, compared to the 4.8% drop a year earlier.

The annual rate of the CPI decreased in November in eight autonomous communities, remained in six and increased in three, remaining at positive levels in all of them. The biggest decreases in the interannual rate were registered in Cantabria, which went from 0.8% to 0.6%, and the Principality of Asturias, which went from 1.0% to 0.8%, and the largest increase, in the Canary Islands , which goes from 0.6% to 0.8%. The highest inflation rates were registered in Catalonia and Navarra (1% and 0.9%, respectively), and the lowest, in La Rioja and the Valencian Community (0.4%, both).

The annual rate of the CPI at constant taxes stood at 0.7% in November, as did the general CPI.

The INE has also published the harmonized CPI (IPCA) for the month of November, whose annual variation rate stands at 0.5%, as in October. This rate is one tenth lower than the one advanced by Eurostat for the euro zone (0.6%, compared to 0.5% in the previous month), thus resulting in a differential of inflation favorable to Spain with respect to the euro zone of one tenth , compared to the null differential registered in October.

In summary, the interannual rate of the CPI remained at 0.7% in November, as the increases in the rates registered in the prices of services and unprocessed food were offset by the decreases in those of energy products and processed foods. Core inflation remains at 0.8% and a one-tenth inflation differential favorable to Spain against the euro zone is registered again, maintaining the competitiveness-price of the Spanish economy.

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