• Prices have been rising for the first time since a year ago, but they remain at very moderate levels
  • All components, especially the most volatile, such as energy and fresh food, explain the rise

The Consumer Price Index (CPI) increased 0.1% in June on a year-on-year basis, according to figures published by the National Statistics Institute (INE). This rate coincides with that advanced by the INE at the end of last month and is three tenths higher than the one registered in May. This price acceleration is mainly explained by the upward trend in food prices, especially the unprocessed, by energy and BINE (non-energy industrial goods) and, to a lesser extent, by services. It is the first time for a year that positive inflation rates have been recorded, but these are very moderate increases that reflect the general improvement of the economic situation and the recovery of consumption in particular.

The prices of energy products registered an interannual rate of -5.7% in June, 0.7 points higher than the previous month. This smoothing in the fall was mainly due to the electric power that registered a monthly increase of 4.6%, compared to the decrease of 2.1% a year earlier. The annual rate was 3.5%, compared to -3.2% last May. Electricity itself has been responsible for more than a tenth of the rise in global inflation; on the other hand, fuels and fuels fell 0.7% in the month, so their year-on-year rate fell 1.4 percentage points to -9.1%. The interannual variation rate of unprocessed food prices has accelerated by 0.9 pp in June, to 3.2%. This rise is mainly due to fresh fruits and other rubrics such as fresh fish and potatoes.

Core inflation (which excludes the most volatile elements of the CPI such as fresh food and energy) increased by one tenth in June, to 0.6%. This acceleration is explained by the bullish behavior of all its large components, especially BINEs that increase their annual rate by two tenths, up to 0.3%, as a result of the rise in automobiles, which increases their annual rate by half a point. , up to 3.5%, and clothing and footwear that increases this rate by one tenth, up to 0.5%. Processed food has increased its interannual rate by three tenths, up to 1.2%, due to the inflationary pressures of oil that raise its annual rate by almost 5 points, to 21.9%.

The prices of the services group recorded an annual growth of 0.7%, one tenth above that corresponding to the previous month, an acceleration that rests on the rubric of tourism and hospitality, whose annual rate increased by one tenth, to 1.2%.

In inter-monthly terms, the CPI increased by 0.3% in June, compared to zero growth in the same month of 2014. This progress is explained by the increase in unprocessed foods, especially by fresh fruits (7.3%) , fresh and frozen fish (1.7%) and potatoes (3.4%), partially offset by the fall of fresh vegetables (-4.8%). Due to the increase in energy products (0.7%), due to the increase in electricity (4.6%), and services, especially organized travel (4.2%).

The annual CPI rate in June increased in all autonomous communities. In five it is higher than the national, Balearic Islands (0.4%), Catalonia (0.3%) and Valencian Community, Basque Country and La Rioja (0.2%). The inflation of the Community of Madrid coincides with the national index. In the rest of the Autonomous Communities, their inflation is below the national rate, especially Extremadura, Castilla-La Mancha and the Canary Islands, with -0.3%. On the other hand, the annual CPI rate for constant taxes stood at 0.1% in June, as was the general CPI.

The INE has also published the harmonized CPI (IPCA) for the month of June, whose annual rate is 0.0%, compared with -0.3% in the previous month. If this rate is compared with that estimated by Eurostat for the whole of the euro zone in June (0.2%), the inflation differential favorable to Spain would worsen four tenths to 0.2 percentage points.

In summary, the annual variation rate of the CPI has increased three tenths in June, due to the evolution of all its major components, especially the most volatile, unprocessed food and energy products. Core inflation has risen one tenth, to 0.6%. Therefore, the upward trend in prices continues, but within low levels. Our inflation remains lower than that of the Eurozone, with the consequent positive effect on the competitiveness of the Spanish economy, which will continue to favor exports, production and employment.



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