• Non-energy industrial goods and services continue to rise and raise core inflation by two tenths
  • The differential with the euro area remains at 0.9 points favorable to Spain, which favors competitiveness

The Consumer Price Index (CPI) decreased 1.3% in January in the interannual rate, according to figures published by the National Statistics Institute (INE). This fall is one tenth less than that anticipated by the INE at the end of that month. The reduction is, therefore, three tenths compared to that of December, which is explained by the more volatile components of the CPI, especially energy products. In relation to the previous month, the general CPI decreased 1.6%, compared to the 1.3% decrease registered in the same month of 2014.

The prices of energy products registered a year-on-year rate of -11.4% in January, a drop that is almost three points higher than the previous month (-8.5%). This greater fall is exclusively due to the heading of fuels and fuels, which intensifies the interannual fall rate by 4.7 points, up to 16.5%, in line with the evolution of oil prices

The year-on-year rate of change in the prices of unprocessed food fell 0.3 points in January to -0.7%. This moderation responds, to a large extent, to fresh fruits and fresh fish.

Core inflation (excluding the most volatile CPI elements, fresh food and energy) rose two tenths in January, to 0.2%. This acceleration is explained by the behavior of its three major components. Services increased their annual rate by two tenths, up to 0.5%, and BINES (non-energy industrial goods) and processed food increased said annual rate by one tenth, down to -0.1% in both cases.

Within the services group, the increase in inflation responded to the heading of tourism and hospitality, whose annual rate went from 1% in December to 1.1% in January. This acceleration is explained, in turn, by the upward evolution of the package of organized trips, which increased by 5.3%, one point more than in the previous month, and also by interurban public transport, which increased its annual rate 2.7 points, up to 4.1%, due to the increase in air transport costs (3.2% in the month).

BIN prices in January increased their annual rate one tenth, down to -0.1%. This slight acceleration responds to the increase in the cost of automobiles and, to a lesser extent, to medicines and therapeutic materials. Processed food, including beverages and tobacco, registered an annual rate of -0.1%, after having maintained -0.2% the previous five months. This increase is explained by the acceleration of items such as oil, tobacco, alcoholic beverages and mineral water, soft drinks and juices, which compensates for the moderation in milk and sugar.

In month-on-month terms, the CPI decreased by 1.6% in January, compared to the 1.3% drop in the same month of 2014. This decrease is explained by the lower cost of energy products, especially fuels and fuels, of the BINES, especially clothing and footwear, and, to a lesser extent, services, particularly tourism and hospitality. Prices of unprocessed food increased by 0.5% compared to December due to increases in potatoes, fresh vegetables, fresh fish and poultry, partially offset by declines in fresh fruits and meat sheep. The prices of processed food increased by 0.2%, due to the rise in the price of oil, tobacco, mineral water, soft drinks and juices and alcoholic beverages, partially offset by the lower price of sugar and milk. .

Energy products registered a 3.3% month-on-month drop in January, as a result of a 5.9% decrease in fuels and fuels, partially offset by a 3.6% rise in the electricity rate. BINES prices decreased by 4.6% compared to the previous month, as a consequence of the seasonal fall in clothing and footwear (-15.2%).

The prices of services decreased 0.1% in January compared to the previous month, a decrease that is mainly explained by the heading of tourism and hospitality (-1.2%) and by telephone service (-0.5% ). Within tourism and hospitality, the seasonal drop in prices for organized trips stands out (-7.9%).

The annual CPI rate in January decreased in all the autonomous communities, in four inflation rates above the national average were registered: Catalonia (-0.9%), the Basque Country (-1%), the Balearic Islands (-1, 1%) and La Rioja (-1.2%). Madrid had the same rate as the national average (-1.3%) and the rest of the communities had lower rates than the average. The lowest corresponded to Castilla-La Mancha, with -2%. The annual rate of the CPI for constant taxes stood at -1.3% in January, as did the general CPI, three tenths lower than the previous month.

The INE has also published the harmonized CPI (IPCA) corresponding to the month of January, whose annual rate stands at -1.5%, compared to -1.1% the previous month. If this rate is compared with that estimated by Eurostat for the euro area as a whole in January (-0.6%), the inflation differential favorable to Spain remains at -0.9 percentage points in the previous month.

In summary, the annual variation rate of the CPI has decreased in January due to the evolution of the prices of energy products and unprocessed food, that is, the most volatile elements. Excluding these, core inflation has increased two tenths, to 0.2% thanks to non-energy industrial goods and services. The moderation of prices allows improvements in the purchasing power of rents and, in general, in the costs of the economy, which favors recovery and job creation. The inflation differential continues to be favorable to Spain compared to the euro area, which produces price-competitiveness gains and drives our exports.

On the other hand, the INE has updated in January the weightings of the different items that make up the shopping basket of the CPI, as it usually does every year in that month. The modifications have been of little importance, being processed foods, energy products and BINES the groups that have increased their weight in the shopping basket: 0.4% the first and 0.3% energy and BINES. These changes have occurred to the detriment of the weight loss of fresh food (-0.6%) and services (-0.4%).

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