• The different calendar of Holy Week has also pushed down the price index
  • Core inflation is reduced by four tenths, up to 0.7%
  • The differential favorable to Spain with respect to the euro zone remains at a percentage point

The Consumer Price Index (CPI) decreased in April by 1.1% year-on-year, three tenths more than in March, 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. The largest year-on-year decline in the CPI is due to the steepest fall in energy prices and, in particular, in electricity. It has also influenced the lower inflation of services derived, to a large extent, from the impact of the different calendar of Holy Week in 2015 and 2016. In an inter-monthly rate, the general CPI increased 0.7% in April, two tenths less than in the Same month last year.

The prices of energy products registered an interannual rate of -15.1% in April, three tenths lower than in March. This greater decrease was due to the departure of electricity, which accentuated the fall four points, to -18.2%. On the other hand, the interannual rate of fuel and fuel prices increased one point, to -14.2%, as a result of the lower decrease of its two components: gas, which has gone from registering an interannual rate of -13 , 8% in March to -13.2% in April, and fuels and lubricants, which have moderated the rate of decline by one point, to -13.4%.

Food inflation was 1.8% in April, three tenths higher than in March, an increase that is entirely explained by unprocessed foods, whose rate has increased by one point, to stand at 3, two%. This acceleration responds, to a large extent, to the evolution of fresh fruit prices. On the other hand, the prices of processed food registered in April a rate of 1.2%, lower by one tenth than in March, highlighting within this group the sharp increase in the prices of oils and fats (15.3%) and of the potatoes and their preparations (14.1%).

Core inflation (excluding the most volatile elements of the CPI, fresh food and energy) decreased four tenths in April, to 0.7%, due in large part to the slowdown in service prices, six tenths to 0, 8% year-on-year This deceleration of services is the result of a divergent behavior of the items that comprise it. The rates of variation in the prices of university education (0%) and urban public transport (-0.6%) remained stable, while those of interurban public transport and tourism and hospitality were reduced 2.7 and 1.7 points , respectively, to stand at -2.3% and -0.1%. These declines have a high seasonal component derived from the celebration of Holy Week in April last year. The other two components of core inflation, processed food and Non-Energy Industrial Goods (BINE), kept their rates virtually unchanged from March, at 1.2% and 0.5%, respectively.

In inter-monthly terms, the CPI increased 0.7% in April, two tenths less than in the same month of 2015. The main components of the general CPI, except for services, whose prices have been reduced slightly (contributed to this increase) -0.2%). Highlights in this group the lowering of the tourism and hospitality component and, in particular, of the organized travel item, -10.6% inter-monthly, compared to the 1.1% increase in April 2015, as a result of the different calendar of the Holy Week. Among the remaining groups, the prices of the BINE have registered an inter-monthly rate of 2.8% in April, lower by one tenth than that of a year earlier and food prices have increased 0.2%, due to food unprocessed (0.5%), while the prices of the processed have stabilized (0%). Highlights in the first group the rise in prices of fresh fruits and fresh fish, compared to the declines recorded last year.

The interannual rate of the CPI has been reduced in April in all the autonomous communities. Six of them registered rates below the national average, the lowest corresponding to Castilla-La Mancha (-1.5%), Comunitat Valenciana, Cantabria and Castilla y León, all with a rate of -1.3%, and Galicia and Aragon, with an inflation of -1.2%. Among the communities with CPI variation rates above the national average, the Basque Country (-0.7%) and Catalonia (-0.8%) registered the highest rates. The interannual rate of the CPI at constant taxes stood at -1.1% in April, as was that of the general CPI.

The INE has published the harmonized CPI (IPCA) corresponding to the month of April, whose annual rate stands at -1.2%, lower by two tenths than the previous month. If this rate is compared with that advanced by Eurostat for the whole of the euro zone in that month (-0.2%), the inflation differential favorable to Spain remains at a percentage point.

In summary, the year-on-year rate of the CPI has been reduced in April by three tenths compared to that of March due to the greater decline in the price of electricity and the lower inflation of services. Core inflation has fallen four tenths, to 0.7%. The inflation differential favorable to Spain against the euro zone remains at a percentage point, with the consequent favorable effects on competitiveness and on our exports.



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