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

The Consumer Price Index (CPI) increased in September by 0.2% year-on-year, following the 0.1% decrease recorded 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 slower rate of fall in the prices of energy products. There was no positive inflation rate since the end of 2015. In inter-monthly terms, the general CPI stabilized in September, compared to the 0.3% decrease experienced in the same month of 2015.

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

Food inflation in September stands at 0.7%, nine tenths lower than the previous month, mainly due to the slowdown in unprocessed food prices, whose rate has been reduced 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 fall in those of fresh vegetables (-4.7% , after the increase of 2.3% in August). The prices of processed food slow down to a lesser extent, two tenths to 0.5% year-on-year.

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

In inter-monthly terms, the CPI stabilized in September, compared to the 0.3% fall in the same month of 2015. By components, the prices of energy products increased 1.5%, after a 3% decrease in a the year before, the services were reduced by 0.8%, as in the same month of 2015, those of the BINE increased by 1.3%, one tenth less than in September last year, and the food ones fell 0.8%, after the 0.1% rise a year earlier.

Within the food group, prices of unprocessed foods decreased 2.6% month-on-month in September, a drop of 2.4 points higher than in the same month of 2015, while those of processed foods stabilized, compared to the slight rise a year earlier (0.2%). It stands out, within the 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 fresh vegetables ( -0.2%, after the 7.1% increase in September last year).

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

The interannual rate of the CPI to constant taxes stood at 0.2% in September, as was the general CPI.

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

In summary, the year-on-year rate of the CPI has increased in September by three tenths, to 0.2%, due to the slower pace of energy prices falling. Core inflation moderates a tenth, to 0.8%, and the inflation differential against the euro zone remains favorable to the Spanish economy, standing at 0.4 percentage points, with the consequent favorable effects on competitiveness and About exports



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