• The price differential with the euro zone stands at 0.7 tenths favorable to Spain, after improving half a point
  • Core inflation moderates at 0.7% for non-energy industrial goods and services

The Consumer Price Index (CPI) decreased 0.4% in August in the interannual rate, according to figures published by the National Statistics Institute (INE). This rate is five tenths lower than that of last July and coincides with that advanced by the INE at the end of last August. The decrease in inflation is explained by the fall in energy prices and, to a lesser extent, by the moderation in the prices of services and non-energy industrial goods (BINE), which was partially offset by the upward trend in food, especially unprocessed.

The prices of energy products registered an interannual rate of -9.8% in August, four points lower than the previous month. All components of the energy index contributed to this decrease. Fuels and fuels reduced their annual rate by 3.4 points, to stand at -14.1%, due to both the drop in the price of fuels and gas. Electric power registered a decrease of 3.3% in the month, compared to the 2.3% rise of a year earlier, which leads to a reduction of its interannual rate of six points, to 2.6% .

The year-on-year rate of change in the prices of unprocessed food has increased significantly, one percentage point in August, to 2.7%, mainly due to the increase in the price of fresh vegetables and fish.

Core inflation (which excludes the most volatile elements of the CPI, such as fresh food and energy), decreased in August by one tenth, to 0.7%. This moderation is explained by the BINE, which reduced its annual rate by one tenth, to 0.3%, and by the prices of services, with annual growth of 0.8%, one tenth below that of the previous month. . This moderation was partially offset by the upward trend in processed foods. The slowdown in services rests on the heading of tourism and hospitality, whose annual rate decreased two tenths, to 1.2%, and due to the moderation in inter-urban transport prices, which reduced their annual rate from -0, 8% from July to -1.8% from August.

The annual rate of processed food, beverages and tobacco increases two tenths, up to 1.4%, mainly due to the evolution of the oil. Compared to a year earlier, this product is 30.3% more expensive, 4.4 points more than in the previous month. Milk and tobacco, on the contrary, have evolved downward, partially offsetting the rise in oil.

In month-on-month terms, the CPI fell by 0.3% in August, compared to the 0.2% advance in the same month of 2014. This decrease is explained by the 4.3% lower cost of energy products, which responded as much to a fall of 3.3% in electricity prices as in fuel and fuel, which decreased by 4.7%, in line with the evolution of oil prices. BINE also contributed (-0.3%), especially clothing and footwear (-1.3%) due to the summer sales.

The annual inflation rate decreased in August in all the autonomous communities. In five it was higher than the national: Balearic Islands (0.2%), Catalonia (-0.1%), the Basque Country (-0.2%), the Valencian Community (-0.3%), La Rioja (-0 ,3%). Andalusia's inflation coincided with national inflation. In the rest of the Autonomous Communities, inflation was below the national rate, with the greatest falls in Extremadura and Castilla-La Mancha, -0.9%, and Castilla y León and Cantabria, with -0.8%. On the other hand, the annual rate of the CPI at constant taxes stood at -0.4% in August, the same as that of the general CPI.

The INE has also published the harmonized CPI (IPCA) corresponding to the month of August, whose annual rate stands at -0.5%, five tenths lower than the previous month. If this rate is compared with that estimated by Eurostat for the euro area as a whole in August (0.2%, the same as in July), the inflation differential in favor of Spain widens half a point to -0.7 points. percentage.

In summary, the annual variation rate of the CPI has decreased by half a point in August, after six months of consecutive increases. The decrease was mainly due to energy prices and to a much lesser extent to BINE and services. The underlying rate has eased one tenth, to 0.7%. The inflation differential favorable to Spain vis-à-vis the Eurozone widens significantly, allowing gains in the competitiveness of the economy, with the consequent favorable effect on exports, production and employment.

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