• Inflation rises three tenths to stand at 0.2% year-on-year, one tenth less than expected
  • The inflation differential favorable to Spain with respect to the euro area stands at 0.4 percentage points

The Consumer Price Index (CPI) increased 0.2% in the interannual rate in September, after the 0.1% decrease registered in August, according to figures published by the National Statistics Institute (INE). This rate is one tenth lower than that advanced by the INE at the end of last month. The increase in the interannual rate of the CPI is due to the lower rate of fall in the prices of energy products. There has been no positive inflation rate since the end of 2015. In month-on-month terms, the general CPI stabilized in September, compared to the decrease of 0.3% experienced in the same month of 2015.

The prices of energy products registered a year-on-year drop of 4.8% in September, more than four points lower than in August (-9.1%). This lower decline is explained by the moderation in the rate of decline in fuel and fuel prices (-4.3%, a drop four points less pronounced than in the previous month) and in electricity (-6.7%, compared to -11.3% in August).

Food inflation stood at 0.7% in September, nine tenths lower than the previous month, mainly due to the slowdown in the prices of unprocessed food, the rate of which has decreased by two and a half points, to stand at 1.2%. This evolution responds, to a large extent, to the lower increase in the prices of fresh fruits (4.8%, compared to 10.3% in the previous month) and to the drop in those of fresh vegetables (-4.7%). , after the 2.3% increase in August). The prices of processed food slowed to a lesser extent, two tenths to 0.5% year-on-year.

Core inflation (excluding the most volatile CPI elements, unprocessed food and energy) declined one tenth in September, to stand at 0.8%, due to the slower pace of advance in service prices, which increased by 1 %, one tenth less than in the previous month. Within this group, organized trips stand out, whose prices decreased by 2.6%, compared to the 4.5% increase of the previous month. Non-energy industrial goods (BINE) maintained their inflation rate at 0.7%, the slight acceleration of the clothing and footwear heading (0.8%, one tenth more than the previous month) being offset by the deceleration of automobiles, two tenths up to 4.4%.

In month-on-month terms, the CPI stabilized in September, against the 0.3% drop in the same month of 2015. By component, the prices of energy products increased 1.5%, after a 3% decrease of a the year before, services decreased by 0.8%, as in the same month of 2015, those of BINE increased 1.3%, one tenth less than in September of last year, and those of food fell 0.8%, after the 0.1% rise a year earlier.

Within the food group, the prices of unprocessed food decreased by 2.6% month-on-month in September, a drop 2.4 points higher than that of the same month in 2015, while those of processed food stabilized, compared to the slight rise of a year earlier (0.2%). Of note, within unprocessed food, the notable reduction in the prices of fresh fruits (-10.4%, compared to -5.7% a year earlier) and the practical stabilization of those of fresh vegetables ( -0.2%, after the 7.1% increase in September of last year).

The interannual rate of the CPI increased in September in all the autonomous communities, reaching positive levels in all of them, except in La Rioja (-0.2%) and in the Valencian Community (-0.1%). The highest inflation rates were registered in Navarra (0.6%), Asturias and Catalonia (0.4% both) and Extremadura and the Basque Country (0.3% both).

The annual rate of the CPI for constant taxes stood at 0.2% in September, as did the general CPI.

The INE has also published the harmonized CPI (IPCA) for the month of September, which remains stable in year-on-year terms, after the 0.3% drop registered in August. If this rate is compared with that advanced by Eurostat for the euro area as a whole (0.4%, two tenths higher than the previous month), the inflation differential favorable to Spain decreases one tenth, to stand at 0 , 4 percentage points.

In summary, the interannual rate of the CPI has increased in September by three tenths, reaching 0.2%, due to the lower rate of fall in energy prices. Core inflation moderates one tenth, to 0.8%, and the inflation differential against the euro area remains favorable to the Spanish economy, standing at 0.4 percentage points, with the consequent favorable effects on competitiveness and on exports.

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