• The annual CPI rate is cut by 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 Institute of Statistics (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 recorded increases of three tenths in the case of unprocessed food and two tenths in non-energy industrial goods. In relation to December, prices have fallen 1.3%.

Energy products registered a zero annual rate in January 2014, compared to the 0.2% advance 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% in the previous month to -0.7%. This moderation results from an inter-monthly decrease of 0.6% 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 tariff.

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

Core inflation or less volatile core prices remained in January at 0.2%. This stability is a consequence of the moderation of the prices of processed foods and services, which has fully compensated for the acceleration of 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 increase their annual rate in January by two tenths, to -0.3%, due to medications and therapeutic material. This item increases its interannual rate 2.8 percentage points, up to 2.3%. On the contrary, mention the evolution of clothing and footwear prices, which cut their annual rate two tenths, up to -0.2%.

Processed food, including beverages and tobacco, reduces its annual rate by six tenths, up 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 to the previous month. To a lesser extent, the lower annual variation rate of other items, such as oils and fats, milk and alcoholic beverages, has influenced.

The month-on-month decrease in January of 1.3% of the general index responds, especially, to BINES and services. Unprocessed foods are expensive 0.9%, due to fresh fish, which increases 6.7%, crustaceans and molluscs (1.9%) and fresh fruit (1.4%). Among energy products, fuels decreased 0.6% while the electricity rate rose 1.4%. BINES fell 4.7% in the month, mainly due to the decline in clothing and footwear prices (-14.9%). Finally, the services show a monthly rate of -0.4%, a drop derived mainly from tourism and hospitality (-1.2%), interurban 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, Castile and 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 the previous months and the underlying rate at constant taxes has been reduced by one tenth, to 0.1%. In the constant tax index, the annual energy rate has been 0.1%, compared to -0.1% in the previous month, and that of unprocessed foods of 0.9% (0.6% in December). Within the core of the inflation underlying constant taxes, the prices of BINES stood at -0.3% year-on-year (-0.5 in the previous month), those of processed foods rose 1.5%, compared to to 2.1% of the previous month, and those of the services fell 0.1%, compared to the stability of December.

The INE has also published the harmonized CPI (CPI) for January, whose annual rate stands at 0.3%, 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 December.

In summary, in January inflation has maintained a moderate behavior. The 0.2% of January is a positive fact 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 maintaining the purchasing power of wages and pensions, 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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