• Core inflation, which excludes the most volatile items in the index, remains at 0.7%
  • The differential favorable to Spain with respect to the euro zone stands at a percentage point

The Consumer Price Index (CPI) decreased in May by 1% year-on-year, down one tenth from that of April, according to figures published by the National Statistics Institute (INE). This data coincides with that advanced by the INE at the end of last month. The lower year-on-year decrease in the CPI is due to the moderation of the rate of fall in energy prices and, in particular, of fuels and fuels and electricity. Within the services sector, tourism and hospitality have also contributed to higher inflation. On a monthly basis, the general CPI increased 0.5% in May, as in the same month last year.

The prices of energy products registered in May an interannual rate of -14%, 1.1 percentage points higher than in April. The lower rate of decline was due to both electricity (which moderated the intensity of the fall almost two points, to -16.4%) and fuels and fuels (which moderated seven tenths, to -13.5% ). In turn, the behavior of this last heading is a consequence of the lower decrease of its two components: gas, which has gone from registering a rate of -13.2% in April to -12.6% in May, and fuels and lubricants, which have decreased the rate of fall almost one point, to -12.6%.

Food inflation stood at 1.6% in May, two tenths lower than the previous month, mainly due to the evolution of unprocessed food prices, whose rate has been reduced by six tenths, to stand at 2.6%. This slowdown responds, to a large extent, to the prices of fresh fruits. In turn, processed food registered a rate of 1.1% in May, one tenth lower than in April.

Core inflation (excluding the most volatile elements of the CPI, fresh food and energy) remained at 0.7% in May, with the pace of progress in processed food prices being practically stable (1.1%, one tenth less than the previous month), of non-energy industrial goods (BINE, 0.4%, one tenth less than in April) and services (0.8%, rate equal to April). However, within services, it is worth noting the disparate behavior of its components. The rate of variation in tourism and hospitality prices increased five tenths, to 0.4%, while that of communications fell six tenths, to 1.8%, due to the prices of telephone services.

In inter-monthly terms, the CPI increased 0.5% in May, the same as in the same month of 2015. This stability occurred despite the fact that the prices of energy products grew 2.3% month-on-month, 1.3 percentage points more than in the same month last year. In the opposite direction, the remaining main components of the general CPI registered in May inter-monthly rates lower or equal to those of a year earlier. BINE prices recorded an inter-monthly rate of 0.8%, lower by one tenth than May 2015, and food prices increased 0.3% (0.5% a year earlier), due to the Unprocessed food (0.8%, compared to 1.4% a year earlier), while the prices of processed food remained stable (0%, as in May last year). Stresses, in unprocessed food, moderation in the rise in prices of fresh fruits (7.8% in May 2016 compared to 9% a year earlier).

On the other hand, service prices grew 0.1%, as in May 2015, as a result of uneven behavior among its components, highlighting the stability of communications prices in May of this year, compared to the increase of 1.6% in May of last year, and the maintenance of tourism and hospitality prices (0.1%), after the decrease of 0.4% in the same month of the previous year.

The interannual rate of the CPI has increased in May in most autonomous communities. Seven of them registered rates below the national average, the lowest corresponding to Castilla-La Mancha (-1.4%), Cantabria (-1.3%), Castilla y León (-1.3%) and Comunidad Valenciana ( -1.2%). Andalusia, Community of Madrid and Murcia registered the same rate as the national CPI (-1%). Among the communities with rates above the national average, the Basque Country and Catalonia registered the highest rates (-0.7% both). The interannual rate of the CPI to constant taxes stood at -1% in May, as was the general CPI.

The INE has also published the harmonized CPI (CPI) corresponding to the month of May, whose annual rate stands at -1.1%, higher by one tenth than that of the previous month. If this rate is compared with that advanced by Eurostat for the whole of the euro zone in that month (-0.1%), the inflation differential favorable to Spain remains at a percentage point.

In summary, the interannual rate of the CPI has increased in May one tenth compared to that of April, due to the moderation in the fall in the price of energy products. The inflation differential favorable to Spain against the euro zone remains at a percentage point for the third consecutive month, with the consequent favorable effects on competitiveness and exports.



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