spanish inflation

Lack of supplies and last year’s price drop key reasons behind soaring costs

Catalonia’s annual inflation rate increased from a rate of 0.3% in June to 0.4% in July, according to information released on Thursday by the Spanish Statistics Institute (INE). This is the highest yearly rate since June 2014, when prices also increased 0.4% compared to the previous year. In Spain as a whole, annual inflation continued at the 0.1% rate registered in June. Therefore, deflation is gradually being left behind, although price increases are still at a low level, mostly due to the continuing low price of fuel on the global market. However, in monthly terms, prices declined by 0.8% in Catalonia, mainly owing to a 13.3% drop in the price of retail goods due to seasonal sales, but also because of a 0.5% drop in the price of fruits and vegetables. The increase in housing rentals, communications and entertainment, mostly travel industry, have not been able to compensate for the aforementioned declining prices in monthly terms.

Prices increased by three-tenths during June and left an annual inflation of 0.3%, the highest in Catalonia in the last year, particularly since June 2014, according to data published Tuesday by the Spanish Institute of Statistics (INE). This data marks the second consecutive month with positive inflation in Catalonia after six consecutive months of recording negative rates. Spain as a whole also entered this June with positive inflation (+0.1%) after 11 months straight of deflation. June 2015 is the first month since June 2014 with positive annual inflation in both Catalonia and Spain as a whole, signifying economic recovery. Prices for electricity – which increased this June after falling last year – and the upward trend in prices of fresh fruit have decisively solidified recent inflation.

In Catalonia, prices rose in March by 0.7% compared to February, due to price increases registered in clothing and fuel, according to the Spanish Institute of Statistics (INE). However, the annual inflation rate remained negative for the 5^th consecutive month, standing at -0.3%. Despite this bad news, March's annual inflation rate was higher than February's -0.8%. The Catalan trend reflects partly that registered in Spain as a whole, where prices rose in March by 0.6%. However, the annual inflation rate remained negative, standing at -0.7%. For Madrid, it represents the 9^th consecutive month of negative inflation, although the situation in March is better than February's -1.1% annual rate.  

Prices in Catalonia dropped by 1.4% in January compared to the figures for December, which represents the biggest monthly decrease ever registered on the records of the Spanish Statistics Institute (INE) (since 2002, when comparable data started to be compiled). Furthermore, the annual inflation rate posted at the end of February reached -0.9%, which is the lowest figure since July 2009, in the middle of the first economic recession. The sustained decrease of oil prices is the main reason for such results and Catalonia has now accumulated 3 consecutive months with negative rates within the Consumption Price Index (IPC) in annual terms. In Spain as a whole, prices dropped by 1.6% in monthly terms at the end of January, which is also the biggest decrease within the series of comparable records. Furthermore, Spain’s annual inflation reached -1.3%, the lowest since July 2007. 

Catalonia ended 2014 with an annual inflation rate of -0.7%, the lowest rate since 1978, when records for the Spain’s Autonomous Communities began, according to data published on Thursday by the Spanish Statistics Institute (INE). The previous month, at the end of November, the annual consumer price index registered a rate of -0.3% in Catalonia. In the whole of Spain, the annual inflation rate at the end of December 2014 was -1%. This is the lowest rate registered since December 1961, when comparable data started to be collected. At the end of November, prices were decreasing by -0.4% in annual terms in Spain as a whole. Therefore, both in Catalonia and in Spain overall, last year ended with a significant price drop, mostly due to falling fuel prices.

For the second time this year, prices have decreased in Catalonia in annual terms. By the end of November, inflation dropped by -0.1% compared to 12 months ago, mostly due to a drop in electricity and fuel prices, according to figures released on Friday by the Spanish Statistics Institute (INE). In monthly terms, prices stagnated over November compared to the October ones. In the whole of Spain, prices dropped by -0.1% in monthly terms and by -0.4% in annual terms. Spain is now accumulating 5 consecutive months of negative inflation rates. The INE explains this annual drop by the price decrease of housing (which includes electricity), transport (which includes fuels) and food and non-alcoholic drinks. In November electricity prices only increased by 0.7% in annual terms, while they grew by 1.7% in October. Fuel prices dropped by -1.8% in November, while they had only decreased by -1.1% in October.

According to figures from the Spanish Institute of Statistics, prices in Catalonia have risen from -0.3% in Octoeber 2013 to an annual inflation rate of 0.1% in October this year, the same as that of September. Inflation has been kept low by falling prices of electricity, while the rising cost of fresh food has prevented negative inflation. In Spain, prices have risen from a -0.6% annual inflation registered 12 months ago to a negative inflation of -0.1%, accumulating four consecutive months of negative rates. The prices of fresh food and non-alcoholic beverages influenced the most the annual price increase in Catalonia, and thus offset the low performance in other sectors that are contributing to keep annual inflation close to zero in Catalonia, and in the negative for the last four months in the whole of Spain.

September figures show that prices are recovering in Catalonia, with inflation posting a 0.1% rate in annual terms. According to figures released by the Spanish Institute of Statistics (INE), Catalonia is showing a positive inflation of 0.1%, up from the -0.1% recorded in August, running away from a deflation scenario. While in Spain, there is a negative annual rate of -0.2%, although it improves the August rate of -0.5%. Overall, prices showing a positive recovery rates were in the sales of fresh fruit and housing. Inflation figures are promising throughout Catalonia, although data is uneven in the provinces of Barcelona, Girona, Lleida and Tarragona showing different positive signs of price stabilizing and positive annual inflation.

In Catalonia prices fell by 8 decimal points this July compared to a year ago and interanual inflation rate stood at 0%, according to the Spain's Statistical Institute (INE). This is a contrast to Spain as a whole, where prices fell by 9 decimal points in July, placing the Consumer Price Index (CPI) in negative figures, as low as -0.3%. This level of negative inflation has not been recorded in the country since September 2010, when the CPI lay at -0.7%. This contrast in inflation rates indicates that the Catalan CPI is able to resist falling into negative numbers, despite what has happened to Spain's economy this year, which already registered negative CPI statistics this March. 

The so-called Consumer Price Index (IPC) – which represents the inflation rate – in May stood at 0.5% in Catalonia in annual terms. In April, it stood at 0.7% according to figures published on Friday by the Spanish Institute of Statistics (INE). Across the whole of Spain, inflation increased by 0.2% in May, while in April a 0.4% inflation rate was recorded, the IPC data confirms.  Core inflation – which does not take into account the prices of energy and unprocessed food –  fell from 0.3% in April to 0.0% in May. The product groups that had a greater impact on May's IPC were food and non-alcoholic beverages (-0.8%), recreation and culture (-1.1%) and hotels, cafes and restaurants (+0.5%).

By the end of December, Catalonia registered a 0.2% annual inflation rate, according to the Spanish Statistics Institute (INE). This figure is the lowest recorded in Catalonia at the end of the year since December 1978, when the INE started providing figures for each of the Autonomous Communities. In the whole of Spain, prices ended 2013 posting an annual inflation rate of 0.3%, the lowest registered on a month of December since 1961; the very year such figures started being released. However, these are not the lowest annual inflation rates, since the record was set in July 2009, with a -0.9% annual rate in Catalonia. In monthly terms, prices increased by 0.2% in December in Catalonia on November figures and by 0.1% in the whole of Spain. The price increase was mostly due to the growth in oil prices, while leisure, culture and clothing helped minimising the general increase.

This October, prices are 0.1% cheaper than they were a year ago, in October 2012, according to the advanced inflation rate released by the Spanish Statistics Institute. If this is confirmed, annual inflation rate would have gone from +0.3% in September to -0.1% in October. Prices of food and non-alcoholic drinks fell and the increase in university education fees was slight. Last year, university tuition fees doubled as one of the austerity measures adopted to reduce public deficit. Regarding monthly changes in the overall inflation rate, prices increased by 0.4% between September and October.