• The annual CPI rate is cut one tenth for processed food, energy products and services, while fresh food and industrial goods rise

The Consumer Price Index (CPI) registered an increase of 0.2% in January compared to a year earlier, one tenth less than the previous month, according to data published today by the National Statistics Institute (INE). This decrease responds to processed food, energy products (fuels and fuels) and services. On the other hand, the rest of the major components of the CPI registered increases of three tenths in the case of unprocessed food and two tenths in non-energy industrial goods. Compared to December, prices have fallen 1.3%.

Energy products registered a null annual rate in January 2014, compared to the 0.2% advance of last December. Within this group, its main component, fuels and fuels, has reduced its annual rate by almost two and a half points, from 1.7% the previous month to -0.7%. This moderation is the result of a 0.6% month-on-month decrease in January of this year, together with an increase of 1.8% in the same month of 2013. On the contrary, it is worth mentioning the increase in the electricity rate.

The annual rate of unprocessed food rises three tenths in January, to 0.9%. This acceleration is mainly due to the increase in the price of fish, which has risen by 3.5%, which may respond to the bad weather that the fleet has kept moored on some days of the month. On the contrary, highlight the moderation of fresh fruits, which reduced their annual rate by 1.3 percentage points to 1.1%. This corrects the strong rebound that these products registered in the period between May and August last year. The prices of fresh vegetables cut their annual rate from 2.8% in December to 0.9% in January.

Core inflation or least volatile price core held steady at 0.2% in January. This stability is a consequence of the moderation in the prices of processed foods and services, which has fully offset the acceleration in the prices of non-energy Industrial Goods (BINES). Services place their annual rate at -0.1%, compared to the stability of the previous month. The reduction is explained by the rubric of urban and interurban public transport and by the communications group, especially the telephone service. BINES increased their annual rate in January by two tenths, down to -0.3%, due to drugs and therapeutic material. This item increases its interannual rate 2.8 percentage points, to 2.3%. Conversely, mention the evolution of clothing and footwear prices, which cut their annual rate two tenths, down to -0.2%.

Processed food, including beverages and tobacco, reduced its annual rate by six tenths, down to 1.7%. This deceleration is mainly explained by the departure of tobacco, which records an annual rate of 3.8%, lower by 3, 5 points from the previous month. To a lesser extent, the lower annual variation rate of other items has influenced, such as oils and fats, milk and alcoholic beverages.

The 1.3% month-on-month decrease in the general index responds, especially, to BINES and services. Unprocessed food is more expensive by 0.9%, due to fresh fish, which increases by 6.7%, crustaceans and molluscs (1.9%) and fresh fruit (1.4%). Within energy products, fuels decreased 0.6% while the electricity rate increased 1.4%. BINES fell 4.7% in the month, mainly due to the decrease in clothing and footwear prices (-14.9%). Finally, services show a monthly rate of -0.4%, a drop derived mainly from tourism and hospitality (-1.2%), long-distance public transport (-1.1%) and communications (-1.5%).

Of the 17 Autonomous Communities, six have registered a year-on-year inflation rate higher than the national average in January. The most inflationary are the Basque Country (0.6%) and the Balearic Islands (0.5%), followed by Galicia, Castilla y León, Catalonia and Cantabria. In Madrid and Murcia inflation has coincided with the national average and in the rest of the communities it has been below the average, registering negative inflation rates in Navarra, the Canary Islands and Extremadura.

In January, the annual rate of the CPI at constant taxes has remained at 0.2% in previous months and the underlying rate at constant taxes has decreased one tenth, to 0.1%. In the constant tax index, the annual rate of energy has been 0.1%, compared to -0.1% the previous month, and that of unprocessed food was 0.9% (0.6% in December). Within the core of inflation underlying constant taxes, BINES prices stood at -0.3% year-on-year (-0.5 in the previous month), processed food prices rose 1.5%, compared to to 2.1% in the previous month, and those of services fell 0.1%, compared to the stability of December.

The INE has also published the harmonized CPI (IPCA) for January, whose annual rate stands at 0.3%, the same as in the previous month. If this data is compared with the annual rate estimated by Eurostat for the euro area as a whole (0.7%), the inflation differential continues to be favorable for Spain, 0.4 percentage points, although one tenth lower than in December.

In summary, in January inflation has maintained a moderate behavior. 0.2% in January is a positive figure to the extent that it facilitates continuity in the moderation of wages, with the consequent positive impact on the competitiveness of production and exports. It also allows the purchasing power of wages and pensions to be maintained, with the consequent favorable impact on consumption. Therefore, it is a fact that facilitates the continuity of the recovery of production and employment and reflects the correction of another of the traditional imbalances of the Spanish economy.

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