According to the data published by the Spanish National Statistics Institute (Spanish acronym: INE), the Consumer Price Index (CPI) fell by 0.9% year-on-year in September. This rate is five-tenths lower than last August and matches the figure announced by the INE at the end of last September. The downturn in inflation can be mainly explained by the sharp fall in energy prices, both liquid fuels and electricity.
The price of energy products recorded a year-on-year rate of -13.6% in September, compared with -9.8% the previous month. This decrease was caused by all components of the energy index. The year-on-year rate for solid and liquid fuels fell by 2.3 percentage points to -16.4%, particularly due to the falling cost of liquid fuels and, to a lesser degree, gas. Electricity posted a reduction of almost nine percentage points on August in its year-on-year rate, to stand at -6.3%.
The year-on-year rate of change in unprocessed food prices has also dropped by 0.1% to 2.6%, mainly due to the month-on-month fall in the cost of fresh fruit. The year-on-year rate for processed foods, beverages and tobacco remained at 1.4%. This was mainly influenced by oil price trends. This product is 29.6% more expensive than one year ago, although that rate is 0.6 points lower than the previous month.
Core inflation (which excludes the most volatile components of the CPI such as fresh food and energy) grew in September by 0.1% to 0.8%. This slight acceleration is due to NEIGs (non-energy industrial goods) and services, up by an annual 0.1% to 0.4% and 0.9%, respectively. The slight acceleration in NEIGs stems from an upward trend in the cost of motor vehicles and inter-urban public transport services, especially air transport.
In month-on-month terms, the CPI fell by 0.3% in September. This decrease can be explained by a 3% reduction in the price of energy products stemming from both a 3.8% fall in electricity prices and a 2.7% fall in solid and liquid fuel prices. Services also contributed to this result (-0.8%) due to tourism and the hospitality industry (-2.3%) and, to a lesser extent, non-processed food (-0.2%), especially fresh fruit (-5.7%).
The year-on-year rate of inflation fell in September in all autonomous regions. The highest year-on-year CPI rates were posted by: the Balearic Islands (-0.4%), Catalonia (-0.5%) and the Basque Country (-0.5%). The lowest rates were posted by: Extremadura and Castile-La Mancha (both -1.5%). Meanwhile, the annual CPI rate at constant taxes in September stood at -0.9%, the same as the general CPI.
The INE also published the harmonised CPI (HCPI) for September, the year-on-year rate of which stands at -1.1% (six-tenths lower than in the previous month). If we compare this rate with that estimated by Eurostat for the Eurozone as a whole in September (-0.1%), the inflation differential favorable to Spain would be four tenths, at one percentage point.
In short, the annual CPI rate of variation fell by half a point in September, as it did last August, after six months of back-to-back rises. In both months, this decrease was mainly caused by the price of energy and enables improvements in the purchasing power of wages and pensions. The core rate rose by 0.1% to 0.8%, reflecting the dynamic nature of consumption. The favourable inflation differential for Spain when compared with the Eurozone rose significantly, having a positive effect on the competitiveness of the Spanish economy and continuing to benefit exports, production and employment.
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