• Core inflation falls two tenths, to 2.1%, for non-energy industrial goods and services
  • Unprocessed food rises 1.1% in December and the annual rate increases six tenths, to 3.9%
  • On an annual average, prices rose 2.4% last year, eight tenths less than in 2011

The Consumer Price Index (CPI) showed a slight month-on-month increase of 0.1% in December, the same as a year earlier, and its year-on-year rate remained at 2.9%, according to data published today by the National Institute of Statistics (INE). Average annual inflation was 2.4%, eight tenths of a percentage less than the previous year.

The annual rate was maintained in December at the same level as the previous month, since the moderation of the most stable components, particularly non-energy industrial goods and services, fully offset the acceleration of the most volatile, especially non-food processed and, to a lesser extent, energy products.

Core inflation (which excludes energy products and fresh food from the general CPI) decreased two tenths, to 2.1%, due to the evolution of non-energy industrial goods and services. Processed food maintained its year-on-year rate, despite the continued upward pressure from the heading of oils and fats, which places its annual rate at 16% (3.3 percentage points more than in November).

Specifically, non-energy industrial goods reduced their annual rate by two tenths, to 1.5%, due to the decrease in clothing and footwear (from 0.5% in November to 0.3% in December) and medicines (four tenths, up to 27.1%). The prices of services moderated their annual rate by one tenth, to 2.2%, to which tourism and hospitality contributed especially, cutting their annual rate from 1.2% in November to 0.9% .

After the sharp drop in November, the annual rate of energy products rose slightly in December (one tenth, to 7.6%) although its main item, fuels and fuels, maintained its annual rate at 5.7%. Fresh food prices increased six tenths, to 3.9% annually. Among them, the increases in fresh legumes and vegetables (from 2.3% to 9.7%), potatoes and preparations (16.9%, 3.6 percentage points more than last month) and, to a lesser extent, stood out. measure, pig meat (4.2%, four tenths more than in November). In contrast, the year-on-year rate for fresh fruits moderated, from 6.2% in November to 3.5% at the end of the year.

The monthly change in the CPI was 0.1%, a rise that is mainly explained by the pressure of food prices, especially unprocessed, and services. Fresh food increased by 1.1%, due to fresh legumes and vegetables (6.5%), potatoes and their preparations (3.2%) and fresh fish (2.3%), while fresh fruit fell ( 2.7%). Processed food recorded a monthly advance of 0.2%, as a result of the continued push in oil prices (3.2%). The prices of services grew by 0.4%, mainly due to the item of organized trips (10.2%). Conversely, the 0.5% decrease in non-energy industrial goods stood out, as a result of the fall in clothing and footwear (1.6%) due to the anticipation of winter sales.

The Autonomous Communities with the highest inflation rate in December were Cantabria and Catalonia (with 3.6%), the Balearic Islands and Castilla y León (3.1%), as well as the Valencian Community (3%). The least inflationary communities were Melilla (1.6%), Ceuta (2.2%), Canarias and Madrid (2.5%).

The CPI for constant taxes kept its annual rate at 0.9%, after rising 0.1% in December. The underlying rate grew 0.2% in the year as a whole, with a drop of one tenth over the November figure.

The INE has also published the harmonized CPI (IPCA) for December, whose annual rate stands at 3%, the same as in the previous month. When compared to the annual rate estimated by Eurostat for the euro area as a whole (2.2%), the differential unfavorable to Spain would remain at 0.8 points. The HICP at constant taxes was also 0.9%.

The December CPI reflects the moderation in inflationary tensions in the Spanish economy, as highlighted by the constant tax index. The cyclical profile of the Spanish economy is contributing to this, as well as the tone of wage moderation observed throughout the last months.

Predictably, over the next few months the CPI will correct the step effect of decisions made in 2012, so that the index can end the year below 2%. The positive impact of this trend towards price stability on the external competitiveness of the Spanish economy should be maintained in the year that has just started. In this regard, the contribution that is made in all areas of procurement, both public and private, takes on special importance.

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