The Consumer Price Index (CPI) recorded a month-on-month increase of 0.2% in November, compared with a 0.1% downturn in the same month of last year. According to the data published last week by the Spanish National Statistics Institute, the year-on-year rate has thus increased by 0.3 points over October to now stand at 0.2%.
Energy products recorded a year-on-year rate of -0.7%, compared with -2.7% in October. The year-on-year rate for solid and liquid fuels rose from -2.5% in October to 0.4% in November. This was due to the moderation of petrol and diesel prices in November 2013 being much lower than the result posted last year.
Underlying inflation or the stable nucleus of prices has risen by 0.2 points to 0.4%. This acceleration was mainly caused by the price of non-energy industrial goods and, to a lesser degree, services. The year-on-year rate posted by non-energy industrial goods rose from -0.8% in October to -0.4% in November, mainly due to the influence of the price of vehicles – the year-on-year rate of which in October (-3.5%) rose to -0.5% in November. The year-on-year rate posted by services stands at 0.1%, compared with a flat rate in the previous month. This increase can mainly be explained by the communications group, which posted a rate of -6.5% in November from -7.5% in October. This stems from an upturn in the rate posted by telephone services from -7.6% in October to -6.5% in November.
Prepared foodstuffs, including beverages and tobacco, posted a 0.2% fall in its year-on-year rate to 2.5%. This deceleration is mainly due to the trends posted by oils and fats, which show a downturn in their year-on-year rates of over 8 points (to 7%). To a lesser extent, this result was also influenced by the moderation seen in the year-on-year rate posted by other components, such as the price of alcoholic beverages mineral water and soft drinks.
The 0.2% month-on-month increase in the overall rate is particularly due to non-energy industrial goods, which rose by 1.5%. This was caused by the clothing and footwear component, which rose by 5% – a seasonal increase caused by the new prices of the autumn-winter season.
14 of the 17 autonomous regions posted a positive rate of inflation, with the highest rates posted by Cantabria (0.8%) and the Basque Country (0.6%). Three regions continued to post negative rates of inflation: the Canary Islands (-0.3%), Navarre (-0.2%) and Extremadura (-0.1%). Inflation in Ceuta and Melilla stands at -0.3% and -0.6%, respectively.
The National Statistics Institute also published the Harmonised CPI (HCPI) for November, the annual rate of which stands at 0.3% (0.3% higher than in the previous month). When compared with the annual rate estimated by Eurostat for the Eurozone as a whole (0.9%), the differential remains positive for Spain by 0.6 points, albeit 0.1 points lower than in October.
In short, the year-on-year rate of inflation in November remains at a very moderate level – 0.2%, in line with the data announced by the Institute at the end of November, which will mean increased purchasing power for groups such as pensioners, and also represents an important reduction in the overall cost of living. Inflation is expected to remain low over the coming months. Given that underlying inflation continues to post figures above zero, no risk of a negative rate is identified in the medium term. Furthermore, it is foreseeable that inflation will remain below the levels seen in Spain’s main competitor countries, with the corresponding positive impact on exports and economic recovery.