- The inflation differential favorable to Spain with respect to the euro zone stands at 0.5 percentage points
- Core inflation increases two tenths in the last year, up to 0.9%
The Consumer Price Index (CPI) decreased in August by 0.1% year-on-year, down five tenths from July, 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 moderation in the fall of the CPI is mainly due to the lower decrease in the prices of energy products, although the acceleration of the prices of services and non-energy industrial goods (BINE) would have also contributed. In month-on-month rate, the general CPI increased 0.1% in August, compared to the 0.3% decrease recorded in the same month of 2015, largely due to seasonal factors related to hospitality.
The prices of energy products experienced an interannual fall of 9.1% in August, almost three points lower than in July (-12%). The lower decline is explained by the moderation in both the rate of decline in electricity prices (-11.3%, compared with -14.9% in July) and in that of fuels and fuels (-8.3 %, compared to -11.1% of the previous month).
Food inflation stood at 1.6% in August, seven tenths lower than the previous month, mainly due to the slowdown in unprocessed food prices, whose rate was reduced by two percentage points, to 3.7% This evolution responds, to a large extent, to the lower increases in the prices of fresh fruits (10.3%, a rate that is 4.1 points lower than that of the previous month) and of fresh vegetables (2.3% , compared to 9.3% recorded in July). The rate of increase in the prices of processed food was also reduced in August, although to a lesser extent, one tenth to 0.7%.
Core inflation (excluding the most volatile elements of the CPI, fresh food and energy) increased two tenths in August, to 0.9%, as a result of the acceleration of the prices of the BINE (three tenths, up to 0, 7%) and services (two tenths, up to 1.1%). Within the BINE, car prices stand out, which have risen 4.6%, almost two points more than the previous month and, within services, the increase in organized travel prices (4.4% year-on-year) , after the slight increase (0.6%) of the previous month, and telephone services (3%, nine tenths more than the month of July).
In inter-monthly terms, the CPI grew 0.1% in August, compared to the 0.3% fall in the same month of 2015. This evolution is due to the lower decline in energy product prices (-1%, compared to to -4.3% a year earlier). The services have also contributed to the month-on-month rise, registering a 0.6% rate, two tenths higher than in August last year. BINE and food prices remained stable, compared with the rates of -0.3% and 0.6% recorded, respectively, in August last year.
Within the food group, prices of unprocessed foods decreased 0.3% month-on-month in August, following the 1.7% increase in the same month of 2015, while prices for processed foods increased slightly (0.1 %), as in August 2015. Highlights, in unprocessed food, the fall in fresh fruit prices (-0.8%, compared to 2.8% growth a year earlier) and of fresh legumes and vegetables (-2.1%, after the 4.6% increase in August last year).
The interannual rate of the CPI has increased in August in all the autonomous communities, standing at positive levels in four of them: Navarra (0.3%), Asturias (0.1%), Catalonia (0.1%) and the Basque Country (0.1%). In addition to these, it registered a higher rate than the Murcia national average, keeping prices stabilized. Extremadura and Andalusia registered a rate equal to the national average (-0.1%), and among those that presented lower than average rates, the lowest corresponded to La Rioja and Castilla y León (-0.4% in both). The interannual rate of the CPI to constant taxes stood at -0.1% in August, as was the general CPI.
The INE has also published the harmonized CPI (CPI) for the month of August, whose annual rate is -0.3%, higher by four tenths than that of July. If this rate is compared with that advanced by Eurostat for the whole of the euro zone (0.2%, as in July), the inflation differential favorable to Spain is reduced by four tenths, to stand at 0.5 points percentage.
In summary, the CPI moderated in August the rate of year-on-year decline for the fourth consecutive month until it practically stabilized, mainly due to the lower fall in energy prices and, to a lesser extent, the acceleration of service and BINE prices. Core inflation has increased by two tenths, to 0.9%, and the inflation differential against the euro zone remains favorable to the Spanish economy, standing at half a percentage point, with the consequent favorable effects on competitiveness and over the exports.
