• Energy products and fresh foods largely explain this evolution
  • The tourism and hospitality item rises 0.5% due mainly to organized travel
  • Spain maintains the positive differential with the euro zone average, at 0.6 points

The Consumer Price Index (CPI) decreased 0.2% in September in a year-on-year rate, according to figures published by the National Institute of Statistics (INE), in line with the advance at the end of September. This rate is three tenths higher than last August, an increase that is largely explained by the evolution of the most volatile components of the CPI, energy products and unprocessed food. In relation to the previous month, the general CPI increased 0.2% in September, compared to the 0.2% decrease recorded in the same month of 2013.

The year-on-year rate of variation of unprocessed food prices recorded a significant increase, almost four percentage points in September, to -1.5%. This evolution is due to a downward step effect of a year ago in fresh fruits, which has led to a moderation of 11.5 points in this item, up to -5.4%. The upward pressure in September of fresh vegetables has also influenced.

The prices of energy products recorded a zero year-on-year rate in September, compared to -0.9% last August. The main components, fuels and fuels and the electricity tariff have contributed to this rate increase. The annual rate of the electricity tariff has increased from 2.8% in August to 8.4%, as a result of a monthly increase of 5.4% in September of the current year, compared to the non-variation in the same month of 2013 Fuels and fuels, meanwhile, have reduced their annual variation rate by 0.7 points, to -2.9%, evolution in line with oil prices.

Core inflation (excluding the most volatile elements of the CPI, fresh food and energy) decreased slightly in September (four hundredths) and stood at -0.1%. This moderation has been due to the prices of services that have reduced their interannual rate by one tenth, up to 0.1%: Processed food, meanwhile, did not change its annual rate of advance and BINES (non-energy industrial goods ) increased this rate by one tenth.

Within the service group, the main bullish item was tourism and hospitality, whose annual rate increased by two tenths, to 0.5%, due largely to organized travel. On the contrary, it is worth mentioning inter-urban public transport that reduces its annual rate from 7.1% in August to 3%, mainly due to air transport, which offset the increases in previous months. BINES prices increased their interannual rate one tenth, to -0.3%, with an acceleration of clothing and footwear of four tenths, to 0.1%.

Processed food, including beverages and tobacco, maintained its annual rate at -0.2%. Stability is explained by increases in the annual rate of items such as oils and fats, bread and tobacco that have offset the declines in sugar, milk and canned fruits.

In inter-monthly terms, the CPI increased 0.2% in September, which is explained by the increase in BINES, energy products and processed food, partially offset by the moderation of services and fresh food. The prices of processed food increased 0.2%, mainly due to the rise in olive oil.

Energy products have registered a monthly advance of 1.4% as a result of a 5.4% increase in the electricity tariff, while fuels and fuels decreased 0.1%. BINES prices increased by 1.3%, as a result of the seasonal increase of 4.9% in clothing and footwear.

The prices of services decreased 0.9% in September at a monthly rate, mainly due to tourism and hospitality (-2.2%). This heading includes organized travel items (-10.9%) and cafe and restaurant hotels (-1%), as well as interurban public transport (-4.5%), especially air transport (-9 ,two%). On the other hand, prices of unprocessed foods decreased 0.1% in September compared to the previous month, due to the fall in fresh fruits (-3.2%), potatoes (-1.6%) and meats of bird (-0.3%) and beef (-0.2%).

Of the 17 Autonomous Communities, six registered a year-on-year inflation rate higher than the national average in September: Balearic Islands (0.3%), Catalonia, La Rioja and the Basque Country (0.1%), Galicia (0%) and Madrid (-0.1%). Aragon and the Valencian Community have the same inflation as the national average (-0.2%), and the rest of the communities have rates below the national average: Andalusia, Cantabria, Castilla y León, the region of Murcia and Navarra (- 0.3%); Asturias and Extremadura (-0.4%). The least inflationary have been Castilla-La Mancha (-0.6%) and the Canary Islands (-0.8%).

The annual rate of the CPI at constant taxes was -0.2% in September, as was the general CPI, three tenths higher than the previous month. The underlying underlying tax has been -0.1%, one tenth less than in August. The annual rate of energy has been 0%, compared with -0.9% in the previous month, and that of unprocessed food in -1.5% (-5.4% in August). Within the core of the inflation underlying constant taxes, BINES prices have registered a year-on-year rate of -0.3% (-0.4% the previous month), processed foods decreased 0.2%, as well that the previous month, and those of services stood at 0.1%, compared to 0.2% the previous month.

The INE has also published the harmonized CPI (IPCA) for September, whose annual rate is -0.3%, two tenths higher than the previous month. If this rate is compared with that estimated by Eurostat for the whole euro zone (0.3%), the inflation differential continues to be favorable to Spain, 0.6 percentage points, three tenths lower than the month of August.

In summary, inflation has increased in September due to the evolution of the prices of its most volatile items, while core inflation has fallen slightly. Inflation is expected to follow this slightly upward trend in the coming months and close the year at moderate but positive levels. The containment of prices favorably affects the improvement of the purchasing power of income and the increase in consumption. It also facilitates the competitiveness gains of the Spanish economy, with the consequent positive impact on the recovery of production and employment.

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