• Core inflation remains at 0.2% for the third consecutive month, confirming price stability
  • Spain registers a favorable inflation differential of 0.7 percentage points with respect to its European partners

The Consumer Price Index (CPI) decreased 0.7% in March in the interannual rate, according to figures published today by the National Statistics Institute (INE). This figure coincides with that advanced by the INE at the end of last month and represents an increase of four tenths with respect to inflation in February. This acceleration is mainly explained by energy products and, to a lesser extent, by processed foods and services. In relation to the previous month, the general CPI increased 0.6%, compared to the 0.2% advance in the same month of 2014.

The prices of energy products registered an interannual rate of -7.4% in March, 2.8 points higher than the previous month. This slowdown in the decline is mainly due to the departure of fuels and fuels, which moderated the year-on-year rate of decline by almost four points, to 9.1%, in line with the upward trend in oil prices in February and March. For their part, electricity prices fell slightly in the month (-0.4%), placing their annual rate at -3.3%, compared to -2.9% the previous month. The year-on-year rate of change in unprocessed food prices remained at 0.9% in March. This stability is due to the fact that the acceleration in items such as fresh fish and fresh fruits has been compensated by the moderation in that of fresh vegetables and some meats such as beef and poultry.

Core inflation (which excludes the most volatile CPI elements such as fresh food and energy) remained at 0.2% in March for the third consecutive month. This stability is due to the moderation in the inflation of BINES (Non-Energy Industrial Goods), offset by the acceleration of services and processed food. BINES have reduced their interannual rate by one tenth, down to -0.2%, while services and processed food have increased it by one and two tenths, respectively, to 0.4% and 0.3%.

Within the services group, the acceleration in prices mainly responded to the heading of tourism and hospitality, whose annual rate increased by half a point, to 1.4%, due to the dynamism of tourist demand as a result of Easter; Thus, the prices of organized trips increased their annual rate from 2.9% in February to 6.5% in March and the hotels, cafes and restaurants increased this rate by one tenth, to 0.7%. Interurban public transport moderated its annual rate 1.3 points to stand at 0%.

BINES prices reduced their annual rate one tenth in March, down to -0.2% (-0.15%). Processed food, including beverages and tobacco, registered a rate of 0.3%, compared to 0.1% the previous month. This increase is explained by the acceleration of items such as oil and tobacco, which offset the moderation of other items, such as milk.

In month-on-month terms, the CPI increased 0.6% in March, compared to the smallest advance (0.2%) in the same month of 2014. This slight advance is explained by the increase in the cost of energy products (especially fuel and fuel) ), services (particularly tourism and hospitality) and processed food (due to the rise in oil). Energy products registered a 2.7% month-on-month increase in March, as a result of a 3.9% increase in fuels and fuels, partially offset by the slight decrease (-0.4%) in the electricity rate and the gas (-1.7%). BINES prices increased by 1.2% compared to the previous month, the same as a year earlier, as a consequence of the seasonal increase in clothing and footwear (4.3%). The prices of services increased by 0.3% in March with respect to the previous month, an advance that is mainly explained by the heading of tourism and hospitality (0.9%).

The annual CPI rate in March increased in all the autonomous communities. Inflation rates above the national average were registered in seven of them: Catalonia (-0.3%), the Basque Country and the Balearic Islands (-0.4% in both), La Rioja and Madrid (-0.5%, in both) and Comunidad Valenciana and Navarra (-0.6% in both). Andalusia, Aragon, the Principality of Asturias, Galicia and Murcia presented a rate of -0.8%, Cantabria and Extremadura of -0.9% and the remaining three reported an inflation rate of -1.1%. The annual rate of the CPI for constant taxes stood at -0.6% in March, one tenth above that of the general CPI.

The INE has also published the harmonized CPI (IPCA) for the month of March, whose annual rate stands at -0.8%, compared to -1.2% the previous month. If this rate is compared with that estimated by Eurostat for the euro area as a whole in March (-0.1%), the inflation differential favorable to Spain is -0.7 percentage points, compared to -0.9 pp from the previous month.

In summary, the annual variation rate of the CPI has increased four tenths in March, due to the evolution of the prices of energy products and, to a lesser extent, of processed food and services. Core inflation has held steady at 0.2% for the third consecutive month. Therefore, the stabilization of prices and the positive inflation differential with respect to the eurozone continues, with the consequent positive effect on the competitiveness of the Spanish economy, which in turn will continue to boost exports, production and employment.



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