• Core inflation, which excludes the most volatile CPI elements, remains at 1.2%

The Consumer Price Index (CPI) increased 0.7% in March with respect to the previous month, the same as a year earlier, and the interannual rate decreased one tenth to 1.9%. After this result, the year-on-year rate recorded a half-point cut in the first quarter of this year and is half the maximum of April last year (3.8%). The moderation of inflation has rested in energy products, raw food and services.

If the most volatile elements of the CPI are excluded – unprocessed food and energy products – the so-called core inflation remains at 1.2%, so that throughout the first quarter this indicator of structural inflation has decreased by three tenths. The stability of March has been due to the fact that the upward evolution of Non-Energy Industrial Goods has been fully compensated by the moderation of services and processed food.

The INE has also published the harmonized CPI (IPCA) for the month of March, whose annual rate stood at 1.8%, one tenth below that registered the previous month. This rate coincides with the IPCA leading indicator published on March 29. Comparing with the estimated annual rate for the Monetary Union as a whole, the differential in favor of Spain would remain at eight tenths.

In month-on-month terms, the rise in the CPI in March is mainly explained by the increase in fuels and fuels (2.8%), by the increase in non-energy industrial goods (1.2%) and in services (0 ,two%).

Compared to a year earlier, all the major special groups moderated with the exception of non-energy industrials, (which increased their annual rate by 2 tenths, up to 0.3% in March). The main moderation occurs in unprocessed food, which decreased its year-on-year rate from 1.8% in February to 1.4% in March, and in energy products, whose annual rate decreased four tenths, to 7.5% . Inflation in services fell one tenth (to 1.2%), the same decrease as processed food (2.7%).

It is worth noting the favorable evolution of the services sector, which so far this year has reduced its inflation rate by half a point, to 1.2% in March, and one point since April 2011.

For all these reasons, the assessment of the CPI for March continues to be positive. Inflation decreases one tenth and continues within the ECB's target band. Underlying inflation and the inflation differential in favor of Spain with respect to its eurozone partners are maintained, with the positive impact that this has on the competitiveness of our economy.

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