Inflation Closes 2012 at 2.9%

According to the flash estimate of the consumer price index (CPI) released yesterday by the National Statistics Institute, annual inflation has maintained its November rate in December 2012 and ended the year at 2.9%. If this data is confirmed (the final results will be announced on 15th), this figure would be five tenths less than at the close of 2011 and would stand almost at 2010 levels, when inflation closed at 3%.

The figure for 2012 would be lower than that recorded in the first year of the crisis, in 2007, when inflation surged to 4.2% (from 2.7% in 2006). In their notification the National Statistics Institute gives no explanation of the price movements in December.

After the inflationary peak in October, in which prices reached 3.5%, in November they fell to 2.9% due to lower prices of medicines and other pharmaceutical products, as well as the drop in prices of fuels and lubricants. When the Institute publishes the final data it will determine whether changes in December were for the same reasons.

Diario Sur reported that January 2012 began with inflation at 2%, a figure which was maintained in February. In March it dropped one-tenth (to 1.9%), in April it rose by two-tenths (to 2.1%), while in May and June it dropped back to 1.9%. From July it began an upward trend rising to 2.2%, then to 2.7% in August and to 3.4% in September (due to a rise in VAT entering into force that month, from 18% to 21% for the general rate and from 8% to 10% for the reduced rate), and to 3.5% in October. November saw the rate drop to 2.9%, which remained unchanged in the final month of 2012.

The National Statistics Institute has also published the harmonised consumer price index (HCPI), which measures changes in prices using the same method in all countries of the eurozone, and according to which shows that the annual inflation has also remained at 3%.