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

The Consumer Price Index (CPI) decreased 0.6% in April in a year-on-year rate, according to figures published today by the National Institute of Statistics (INE). This rate coincides with that advanced by the INE at the end of last month and is higher by one tenth than in March. This slight price acceleration 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 unprocessed food and services. With respect 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 smoothing in the fall was mainly due to electric power, which increased 1.6% in the month, compared to the stabilization a year earlier. This item moderates the annual rate of decline of 1.5 percentage points to -1.8%. On the other hand, fuels and fuels increased the tenth year-on-year rate of decline, to -9.2%, due to the decrease in the price of gas (-3.3%). The interannual variation rate of unprocessed food prices has decreased 0.7 points in April, to 0.2%. This slowdown is due to fresh fruits and, to a lesser extent, other rubrics such as sheep and poultry meat.

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

Within the services group, the lowest inflation responded to the tourism and hospitality sector, whose annual rate was reduced 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 Holy Week, which last year was held entirely in April and this year has been held between March and April. The fall in prices of interurban public transport has also contributed to the moderation of services inflation.

The prices of non-energy industrial goods 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 and car prices. Processed food, including beverages and tobacco, registered a rate of 0.7% in April, compared with 0.3% in the previous month. This increase is mainly explained by the acceleration of items such as oil and coffee and cocoa, among others.

In inter-monthly terms, the CPI increased 0.9% in April, as in the same month of 2014. This progress is explained by the increase in BINES (especially clothing and footwear and cars), services ( particularly tourism and hospitality and interurban public transport), processed food (oil) and energy products (electricity rate, 1.6%), partially offset by the fall in prices of unprocessed food (- 0.5%), especially of fresh fruits. BINES prices increased 2.9% compared to the previous month, a slightly higher rate than a year earlier, as a result 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, progress that is mainly explained by the tourism and hospitality item (0.7%) and by interurban public transport (1.2%) .

The annual CPI rate in April increased in five autonomous communities. In six of them, inflation rates higher than the national average were recorded: Balearic Islands (-0.2%), Catalonia (-0.3%), and Comunidad Valenciana, La Rioja, Madrid and the Basque Country, all of them 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 remaining -1%. The annual rate of the CPI at constant taxes was -0.6% in April, the same as that of the general CPI.

The INE has also published the harmonized CPI (CPI) for the month of April, whose annual rate is -0.7%, compared with -0.8% in the previous month. If this rate is compared with that estimated by Eurostat for the whole of the euro zone 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 by one tenth in April, 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 in positive. Therefore, price recovery 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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