• Core inflation rises one tenth, to 0.8%, for non-energy industrial goods and services
  • The price differential with the euro zone stands at a point favorable to Spain after improving four tenths

The Consumer Price Index (CPI) decreased 0.9% in September in the interannual rate, according to data published by the National Statistics Institute (INE). This rate is five tenths lower than last August and coincides with that advanced by the INE at the end of last September. The decrease in inflation is mainly explained by the sharp fall in energy prices, both fuel and electricity.

The prices of energy products registered a year-on-year rate of -13.6% in September, compared to -9.8% the previous month. All components of the energy index contributed to this decrease. Fuels and fuels reduced their annual rate by 2.3 percentage points, to -16.4%, especially due to the drop in the price of fuels and, to a lesser extent, gas. Electric power registered a decrease compared to August in its interannual rate of almost 9 percentage points, down to -6.3%.

The year-on-year rate of change in the prices of unprocessed food has moderated one tenth, to 2.6%, mainly due to the month-on-month drop in fresh fruits. The annual rate of processed food, beverages and tobacco remained at 1.4%, mainly due to the evolution of the oil. Compared to a year earlier, this product is 29.6% more expensive, although that rate is 0.6 points lower than the previous month.

Core inflation (which excludes the most volatile elements of the CPI, such as fresh food and energy), increased by one tenth in September, to 0.8%. This slight acceleration is explained by BINE (non-energy industrial goods) and services, which increased their annual rate by one tenth, to 0.4% and 0.9%, respectively. The slight acceleration of the BINE responds to the push of the price of the automobiles and in the services to the interurban public transport, especially its departure of air transport.

In month-on-month terms, the CPI fell 0.3% in September. This decrease is explained by the 3% lower cost of energy products, which responded to both a 3.8% drop in electricity prices and fuel and fuel prices, which decreased by 2.7%. Services also contributed (-0.8%), due to the decrease in the heading of tourism and hospitality (-2.3%), and to a lesser extent unprocessed food (-0.2%), especially fruits fresh (-5.7%).

The annual inflation rate decreased in September in all the autonomous communities. Those with the highest annual CPI rate were: Balearic Islands (-0.4%), Catalonia (-0.5%) and the Basque Country (-0.5%). And those with the lowest rates were: Extremadura and Castilla-La Mancha (-1.5% in both). On the other hand, the annual rate of the CPI at constant taxes stood at -0.9% in September, the same as that registered by the General CPI.

The INE has also published the harmonized CPI (IPCA) corresponding to the month of September, whose annual rate stands at -1.1%, six tenths below that of the previous month. If this rate is compared with that estimated by Eurostat for the euro area as a whole in September (-0.1%), the inflation differential favorable to Spain widens four tenths, up to a percentage point.

In summary, the annual variation rate of the CPI has decreased by half a point in September, the same as that of last August, after six months of consecutive increases. The decrease has been due in both months, mainly to energy prices and allows improvements in the purchasing power of wages and pensions. The underlying rate has increased one tenth, to 0.8%, reflecting the dynamism of consumption. 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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