• Core inflation increases one tenth, up to 1.1%
  • The differential of Spain against the Eurozone improves one tenth

The Consumer Price Index (CPI) decreased in March by 0.8% year-on-year, as in February, 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 stability of the interannual rate is due to higher inflation of unprocessed food and services that has offset the most pronounced fall in energy prices. On a monthly basis, the general CPI increased 0.6% in March, as in the same month of 2015.

The prices of energy products in March registered a year-on-year rate of -14.8%, lower by seven tenths than in February. This greater decrease was due to the departure of fuels and fuels, which accentuated the fall one point, to -15.2%, due to the evolution of the prices of fuels and lubricants (-14.4%, compared to – February 13.3%). On the other hand, the interannual rate of electricity prices has remained at -14.2%. Food inflation stood at 1.5% in March, three tenths above February, an increase that is entirely explained by unprocessed foods, whose rate has increased from 0.8% in February to 2.2% in March. This acceleration responds, to a large extent, to the evolution of prices of fresh vegetables and fresh fruits. On the other hand, the prices of processed food registered in March a rate of 1.3%, as in February, the strong increase in the prices of oils and fats (18.5%) and of potatoes and their preparations (14.5%).

Core inflation (excluding the most volatile elements of the CPI, fresh food and energy) increased one tenth in March, to 1.1%, due to the slight acceleration of service prices, whose rate increased one tenth, to 1.4% year-on-year This acceleration of services was 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 stabilized, while those of interurban public transport and tourism and hospitality increased 1.8 and 0.1 points, respectively, up to 0.4% and 1.6%. These increases have a high seasonal component derived from the celebration this year of Holy Week in the month of March. The other two components of core inflation, processed food and Non-Energy Industrial Goods (BINE), kept their rates unchanged from February, at 1.3% and 0.5%, respectively.

In inter-monthly terms, the CPI increased 0.6% in March, as in the same month of 2015. This increase is explained by the increase in the prices of energy products and BINE, with rates of 1.8 % and 1.1%, respectively. Stresses in this second group the increase in the component of clothing and footwear, 4.3% inter-monthly, as in the same month of 2015, as a result of the start of the new spring-summer season. To a lesser extent, service prices have also contributed to the inter-monthly increase in general CPI, with a rate of 0.4%, due in part to the increase in tourism and hospitality (1.1%) and interurban public transport ( 2.2%), the latter affected by the rise in air transport prices (5%). Finally, food prices have not changed with respect to the month of February, by offsetting the increase in processed food (0.1%) and the drop in unprocessed food (-0.2%). Stresses in this second group the decrease in prices of fresh fish and fresh fruits, and the rise in prices of fresh vegetables.

The interannual rate of the CPI remained negative in March in all autonomous communities. Eight rates were lower than the national average, with the lowest rates corresponding to Castilla-La Mancha (-1.4%) and Galicia, Valencian Community, Cantabria and Castilla y León, all of them with a rate of -1.1% . Among the communities with CPI variation rates above the national average, the Basque Country (-0.4%) and Catalonia (-0.6%) registered the highest rates. The interannual rate of the CPI to constant taxes stood at -0.8% in March, as was the general CPI.

The INE has published the harmonized CPI (CPI) corresponding to the month of March, whose annual rate stands at -1%, the same as 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 is extended by one tenth, standing at -0.9 percentage points.

In summary, the year-on-year rate of the CPI has remained at the level of February in March due to higher inflation of unprocessed food and services that has offset the intensification in the fall in prices of energy products. Core inflation has increased one tenth, to 1.1%, reflecting the dynamism of private consumption. The inflation differential favorable to Spain against the euro zone improves one tenth, with the consequent favorable effects on competitiveness and our exports.

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