• Core inflation remains at 2.3% for non-energy industrial goods and processed food
  • The prices of energy products are reduced 2.7 points and fresh food by six tenths

The Consumer Price Index (CPI) recorded an inter-monthly increase of 0.4% in March, compared to a significantly higher increase (0.7%) than a year earlier, and its interannual rate fell four tenths, to 2 , 4%, according to data published today by the National Institute of Statistics (INE). The moderation of the annual inflation rate has been due, in particular, to the slowdown in the prices of energy products and, to a lesser extent, to that of unprocessed foods. Processed food and non-energy industrial goods (BINES) maintained their respective annual rates, while services accelerated during Holy Week (last year was held in April).

Beginning the analysis of the annual rate for the prices of energy products, this has moderated in March, after the rise in February, and has been significantly reduced by 2.7 percentage points, up to 3.2%; to which it has contributed, especially, its main item, fuels and fuels, which has moderated its annual rate by 3.7 percentage points, up to 1.4%. On the other hand, fresh foods, for the second consecutive month, have decreased their annual rate, by 0.6 percentage points to 2.5%, due to the slowdown in the prices of some meats, such as sheep, poultry and pigs. , eggs and fresh fish. Practically, no item in this group has increased its annual rate appreciably.

Turning to the groups that are part of the most stable core of the general index, the so-called underlying inflation, highlights the stability of the BINES, at 1.4%, and processed food, at 3.6%. Within the BINES, the most bullish item remains that of medicines and therapeutic material, which has remained in the month but its annual rate increases one tenth, to 26.3%. On the other hand, processed foods have maintained their annual rate at 3.6%, for the third consecutive month, but after this stability there are disparate behaviors. The main inflationary tensions continue to come from oils and fats, which place their annual rate at 19.5%, 4 tenths above that of February. In the opposite direction, the milk products item registered a year-on-year decrease of 0.9%, falling four tenths more pronounced than that of February. On the other hand, the annual rate of services prices increased by two tenths, up to 2.4%, mainly due to the departure of tourism and hospitality that has increased its annual rate by half a point, to 1.4%, the result of the Holy Week effect; There is also an increase in the annual intercity public transport rate, by 0.6 percentage points, up to 7.3%.

As a result of this evolution, the Core inflation remained at 2.3%. In the absence of the Holy Week effect, which responds to the mobility of this holiday, this indicator would have been around a lower tenth.

The monthly variation of the CPI has been 0.4%, compared to 0.7% a year earlier. This increase responds mainly to the item of clothing and footwear that has registered an increase of 4%, seasonal and the rubric of tourism and hospitality. On the contrary, it is worth mentioning a 0.6% decrease in energy products, as a result of the 0.8% drop, in its main item, fuels and fuels; as well as the 0.5% decrease in fresh food, as a result of the fall in the price of most fresh meats and fruits, and in interurban public transport (-0.3%).

The Autonomous Communities with the highest inflation rate in March were Catalonia (with 3%) and Murcia and the Balearic Islands (2.6% in both). The least inflationary communities were Melilla (0.9%), Ceuta (1.3%) and the Canary Islands (1.8%).

In March, the annual rate of the CPI at constant taxes decreased three tenths, to 0.4%, and the underlying rate remained at 0.3%. Within this index the annual energy rate was 0.4% (3.1% in February) and that of fresh food, 1.5% (2.1% in February). Within the core of inflation underlying constant taxes, BINES prices fell 0.8%, processed foods rose 2.1% and services prices 0.4%.

The INE has also published the harmonized CPI (CPI) in March, whose annual rate is 2.6%, three tenths below that of the previous month. When compared with the annual rate estimated by Eurostat for the whole euro zone (1.7%), the unfavorable differential to Spain would decrease by two tenths to stand at 0.9 points.

The HICP at constant taxes stood at 0.5%, three tenths less than in February. Its components experienced similar variations to those observed in the general CPI: the most volatile elements, energy and unprocessed foods, saw their annual rates cut by 2.7 and 0.6 percentage points respectively, up to 0.4 and 1.5% . Among the special groups whose prices approximate the underlying inflation at constant prices (0.3%), processed foods maintained their annual rate at 2.1%, the BINES reduced it by one tenth (up to -0.8%) and the Services increased by two tenths, reaching 0.4%.

In short, the evolution of prices for the month of March has been characterized by moderation, which is in line with expectations. The annual inflation rate has decreased, and discounting the Holy Week effect, core inflation would also have decreased.

For the coming months, this price moderation is expected to continue so that, together with the expected wage moderation, the competitiveness gains of the Spanish economy are consolidated, with the consequent positive impact on foreign investment and exports.



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