• Core inflation, which excludes the most volatile elements of the CPI, decreased by one tenth and stood at 1.1%

The Consumer Price Index (CPI) increased 1.4% last April compared to the previous month, two tenths more than a year earlier, and the interannual rate rose two tenths, to 2.1%. After this result, the year-on-year rate grew for the first time since last September, but throughout the first four-month period of the year it recorded a cut of three tenths. The increase in inflation is due to the rise in energy products, especially the electricity tariff for domestic uses, manufactured gas and butane; and food, especially tobacco.

When excluding the most volatile elements of the CPI – unprocessed food and energy products – the year-on-year rate of core inflation decreases one tenth and stands at 1.1%, which means that during the first four months of the year this structural indicator falls four tenths. The moderation in April is due to the evolution of Non-Energy Industrial Goods and services, which have largely offset the acceleration of processed food derived from the rise in tobacco.

The INE has also published the harmonized CPI (HICP) for the month of April, whose annual rate stands at 2%, two tenths above that registered in the previous month. This rate coincides with the IPCA leading indicator published on April 27. Comparing with the estimated annual rate for the Monetary Union as a whole, the differential in favor of Spain would be six tenths, compared to –0.9 percentage points the previous month.

The month-on-month rise in the CPI in April is explained by the contribution of all major groups. Energy products – where the increases in the electricity tariff for domestic uses, manufactured gas and butane gas stand out – rise 2.9%. Food recorded a rise of 0.6%, highlighting the increase in tobacco (3.9%). In non-energy industrial goods (with an increase of 9.9% in clothing and footwear derived from the pricing for the spring-summer campaign) the month-on-month variation is 2.7%. As for services, the growth over the month of March is 0.5%, mainly focused on tourism and hospitality.

Compared to a year earlier, food – fresh and processed products – and energy products showed a bullish evolution, while non-energy industrial goods and services – components that usually have a higher degree of stability – moderated.

In fact, the annual rate of processed food rises two tenths, to 2.9%, due to the aforementioned rise in tobacco, and that of food without processing increases by seven tenths, to 2.1%. The highest rise occurs in energy products, whose annual rate grows 1.4 percentage points, to 8.9%.

Non-energy industrial goods moderate their annual rate by two tenths, up to 0.1%, thus returning to the level of last February. Inflation in services falls one tenth (to 1.1%). It is worth noting the favorable evolution of the services sector, which so far this year has recorded a cut of six tenths and 1.1 points since April 2011.

Despite the increase of two tenths in the general index, the evolution of prices in April is positive. The rise is attributable to the rise in the most volatile elements, such as food, and to specific increases in energy. However, core inflation, which is the most appropriate indicator to identify price trends, falls one tenth in April and four tenths so far this year.

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