• The moderation of the services sector and the increases in processed food leave the underlying inflation at 0.2%
  • The differential with the euro zone remains at 0.9 points, which favors competitiveness

The Consumer Price Index (CPI) decreased 1.1% in February on a year-on-year basis, according to figures published by the National Statistics Institute (INE). This fall coincides with that advanced by the INE at the end of that month and represents an increase of two tenths compared to January inflation. This increase is explained by the more volatile components of the CPI, unprocessed foods and energy products. In relation to the previous month, the general CPI increased by 0.2%, compared to non-variation in the same month of 2014.

The prices of energy products registered an interannual rate of -10.2% in February, 1.2 points higher than the previous month (-11.4%). This lower fall is due exclusively to the departure of fuels and fuels, which moderate 3.6 points the rate of year-on-year decline, up to 12.9%, in line with the upward trend in oil prices during February. In the opposite direction, electricity prices evolved by reducing the electricity tariff for domestic uses by 5.2% in the month and by almost six points its annual rate, up to -3%.

The interannual variation rate of unprocessed food prices has increased 1.6 points in February, to 0.9%. This strong acceleration has responded, to a large extent, to fresh fruits and fresh vegetables.

Core inflation (excluding the most volatile elements of the CPI, fresh food and energy) remained at 0.2% in February. This stability responds to the fact that the moderation of the inflation of services was compensated by the acceleration of the processed food and the stability of the interannual rate of the BINES (non-energy industrial goods). The services moderated their annual rate by two tenths, up to 0.3%, the BINES kept it at -0.1% and the processed food increased that annual rate by two tenths, to 0.1%.

Within the services group, the deceleration of inflation responded to the rubric of tourism and hospitality and to that of interurban public transport. The annual rate of the first heading goes from 1.1% in January to 0.9% in February, due to the slowdown in organized travel prices, which reduce its annual rate by 2.5 percentage points, to 2, 9% Interurban public transport moderates its annual rate from 4.1% in January to 1.3% in February, due to the slowdown of more than 6 points in air transport prices.

BINES prices maintained their annual rate at -0.1% in February. This stability is mainly due to the fact that the fall in the prices of clothing and footwear in the current year, due to the winter sales, has been the same as a year earlier. Processed food, including beverages and tobacco, has an annual rate of 0.1%, compared to -0.1% in the previous month. This increase is explained by the acceleration of items such as oil and tobacco that compensate for the moderation of others such as milk.

In inter-monthly terms, the CPI increased 0.2% in February, compared to the non-variation in the same month of 2014. This slight advance is explained by the increase in energy products, especially fuels and fuels, of services, particularly tourism and hospitality and food prices. The prices of unprocessed food increased 0.8% compared to January, mainly due to the rise in fresh vegetables (10.5%) and, to a lesser extent, to poultry meat. They lowered the fish, fresh fruits and sheepmeat. The prices of processed food increased 0.1%, due to the rise in oil and tobacco, partly offset by the lowering of sugar and milk.

Energy products registered a month-on-month increase of 1.4% in February, as a result of a 4.1% increase in fuels and fuels, partly offset by the 5.2% drop in the electricity tariff. BINES prices decreased 0.4% compared to the previous month, as a result of the seasonal fall in clothing and footwear (1.7%).

The prices of services increased 0.1% in February with respect to the previous month, an advance that is mainly explained by the tourism and hospitality item (0.4%). This increase was partially offset by the 2% decrease in interurban public transport, as a result of a 4.2% drop in air transport prices.

The annual rate of the CPI in February increased in all the autonomous communities except in the Canary Islands, which declined one tenth. Inflation rates higher than the national average were recorded in six autonomous communities: Catalonia and the Basque Country (-0.8%, in both), Balearic Islands, La Rioja and Madrid (-0.9%, in all three) and Community Valencian (-1%). Andalusia had the same rate as the national average (-1.1%) and the rest of the communities rates below the average. The minors corresponded to Castilla-La Mancha and Castilla-León with -1.6%, in both. The annual rate of the CPI to constant taxes stood at -1.1% in February, as was the general CPI, two tenths higher than the previous month.

The INE has also published the harmonized CPI (CPI) corresponding to the month of February, whose annual rate stands at -1.2%, compared with -1.5% in the previous month. If this rate is compared with that estimated by Eurostat for the whole of the euro zone in February (-0.3%), the inflation differential favorable to Spain remains at -0.9 percentage points the previous month.

In summary, the annual variation rate of the CPI has increased in February by two tenths, due to the evolution of the prices of energy products and food, especially the unprocessed. Core inflation has remained at 0.2%, following increases in the previous two months. The moderation in the evolution of prices is therefore maintained, which favorably affects the competitiveness of the Spanish economy and allows gains in the purchasing power of wages and pensions. These improvements represent a boost to consumption and investment with the consequent impact on job creation, the main objective of economic policy.

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