Catalonia sees prices fall to 3.2% from 3.6% in July

Madrid (ACN) .- Summer sales, which have dropped by 4% since June, have helped to lower the annual inflation rate in July for the third consecutive month putting the annual rate at 3 2%, the lowest this year. For the whole of Spain, prices have fallen from 3.6% to 3.1%, also marking the third consecutive month of decline, according to the Spanish Statistical Institute. The increase in tobacco prices and rising prices of package tourist tours for this summer, have prevented a more substantial decrease of the annual inflation rate. Inflation decreased in all Catalan provinces and the annual rate was set at 3.2% for Barcelona, 3.6% for Girona, 3.5% for Lleida, and 3.3% for Tarragona.

The Spanish Statistics Institute has also publicised that core inflation, which ignores the most volatile prices such as fresh food and fuel, was located at 1.6% in July. It was 1.7% in June.

Prices down in annual terms

The behaviour of prices in Catalonia over the past year has been conditioned by the performance of some sectors, in particular by the communications industry, the kitchenware industry and the transport sector. Specifically, the communications sector has been favourably influenced by market competition, forcing companies to keep prices down or loose customers. This is in contrast to July last year when prices increased. The kitchenware industry was greatly influenced by the strength of furniture prices which fell more substantially this July than in July last year. The performance of the transport sector has been determined as much by falling car prices, which have been partly neutralised by the increase in the price of fuel.

Prices on the rise in annual terms

The commodities which have seen their price increase in the last 12 months have been related to leisure and culture, alcohol and tobacco. Leisure and culture has been influenced by the rise in the price of package tours. The excellent tourist season, which has been experienced this year, has led to an increase in demand, driving prices upwards. Thus, the annual inflation rate in this sector has increased from -0.4% to 0.4% in Catalonia, and from -0.8% to 0.1% for the whole of Spain. Particular attention should be paid to the field of alcohol and tobacco, which has been significantly affected by the so called 'price war' on tobacco.

Products in the low monthly rate

Yet it is the clothing and footwear industry that has had the biggest influences on low prices for the summer sales season. The prices of these products have fallen in Catalonia by 12.6% and in Spain by 12% throughout July.

Furthermore, the total product sales of kitchenware experienced a price drop of six tenths and eight tenths in Catalonia in Spain respectively, a price which was made possible by the low prices of textiles for home furnishings.

Prices on the rise in monthly terms

The commodities which have witnessed a price increase are almost all linked to tourism, including hotels, cafes, restaurants and tours. Leisure and culture prices saw an increase of between 2.8% and 2.3% in Catalonia an overall increase of 0.9% to 0.7% in the whole of Spain. This is a seasonal change.

Other sectors that have counteracted the general monthly price decrease were the housing, transportation, and alcoholic beverages and tobacco. Within the housing market, there has been a monthly price increase of 1.1% both in Catalonia and the whole of Spain influenced by the rising price of gas and electricity which has increased in price from the 1^st July. The costs of alcoholic beverages and tobacco, which are still being recorded, have, at the time of writing, increased by 2% in Catalonia and the whole of Spain. Finally, the transport sector is once again one of the main causes behind inflation numbers due to the volatility of fuel prices and a small increase in the cost of cars. In July, the price of the industry rose eight-tenths and six tenths in Catalonia and in Spain respectively.