• The annual inflation rate rises one tenth after rising 0.9% compared to March and chained three months higher
  • Processed food, energy and non-energy industrial goods explain the evolution
  • The so-called core inflation rises one tenth, to 0.3%, and registers the fourth month in positive
  • The inflation differential favorable to Spain with respect to the euro area remains at 0.7 points

The Consumer Price Index (CPI) decreased 0.6% in April in the interannual rate, according to figures published today by the National Statistics Institute (INE). This rate coincides with that advanced by the INE at the end of last month and is one tenth higher than that of March. This slight acceleration in prices is mainly explained by the upward trend in the prices of processed food, energy products and Non-Energy Industrial Goods (BINES), partially offset by the slowdown in raw food and services. Compared to March, prices rose 0.9%.

The prices of energy products registered an interannual rate of -7.2% in April, 0.2 points higher than the previous month. This softening in the fall was mainly due to electric power, which increased 1.6% in the month, compared to the stabilization of a year earlier. This item moderates the year-on-year rate of decline by 1.5 percentage points, to -1.8%. For their part, fuels and fuels increased the year-on-year rate of decline by one tenth, down to -9.2%, due to the decrease in gas prices (-3.3%). The year-on-year rate of change in unprocessed food prices fell 0.7 points in April to 0.2%. This slowdown is due to fresh fruits and, to a lesser extent, other headings such as sheep and poultry meat.

Core inflation (which excludes the most volatile CPI elements such as fresh food and energy) rose one tenth in April, to 0.3%, after three months of stability at 0.2%. This increase is explained by the upward behavior of inflation in processed food and non-energy industrial goods, partially offset by the slight slowdown in service prices. Processed food has increased its interannual rate by four tenths, to 0.7%, and non-energy industrial goods have increased by two tenths, to 0.0%. Services have moderated their annual rate by one tenth, up to 0.3%.

Within the services group, the lower inflation was due to the heading of tourism and hospitality, whose annual rate decreased 0.8 points, to 0.6%. The organized travel item went from registering a rate of 1.1% in March to 0.5% in April. In turn, this slowdown is explained, in part, by the different calendar of Easter, which last year was held entirely in April and this year was held between March and April. The fall in prices of interurban public transport has also contributed to the moderation of inflation in services.

Non-energy industrial goods prices increased their annual rate two tenths in April, to 0.0%, after more than a year and a half of uninterrupted declines. This evolution responds to the behavior of clothing and footwear prices and automobiles. Processed food, including beverages and tobacco, registered a rate of 0.7% in April, compared to 0.3% the previous month. This increase is mainly explained by the acceleration of items such as oil and coffee and cocoa, among others.

In month-on-month terms, the CPI increased 0.9% in April, the same as in the same month of 2014. This advance is explained by the increase in the cost of BINES (especially clothing and footwear and automobiles), services ( particularly tourism and hospitality and long-distance public transport), processed food (oil) and energy products (electricity tariff, 1.6%), partially offset by the fall in prices of unprocessed food (- 0.5%), especially of fresh fruits. BINES prices increased by 2.9% compared to the previous month, a rate slightly higher than the one a year earlier, as a consequence of the seasonal increase in clothing and footwear (10.6%). The prices of services increased by 0.3% in April compared to the previous month, an advance that is mainly explained by the heading of tourism and hospitality (0.7%) and interurban public transport (1.2%) .

The annual rate of the CPI in April increased in five autonomous communities. Inflation rates above the national average were registered in six of them: Balearic Islands (-0.2%), Catalonia (-0.3%), and the Valencian Community, La Rioja, Madrid and the Basque Country, all with – 0.5%. Andalusia and Navarra showed an inflation rate of -0.7%, Asturias, Galicia and Murcia -0.8%, Aragón -0.9%, Castilla la Mancha -1.2% and the rest -1%. The annual rate of the CPI for constant taxes stood at -0.6% in April, the same as that of the general CPI.

The INE has also published the harmonized CPI (IPCA) for the month of April, whose annual rate stands at -0.7%, compared to -0.8% the previous month. If this rate is compared with that estimated by Eurostat for the euro area as a whole in April (0%), the inflation differential favorable to Spain remains at 0.7 percentage points.

In summary, the annual variation rate of the CPI has increased in April by one tenth, due to the evolution of the prices of processed food, BINES and energy products. Core inflation rises one tenth, to 0.3% and chains four months positive. Therefore, the recovery in prices continues in a context of moderation. The inflation differential remains favorable with respect to the eurozone, with the consequent positive effect on the competitiveness of the Spanish economy. This in turn drives exports, production and employment.

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