Prices fall 0.7% in October

 

The Consumer Price Index fell by 0.7% in October year-on-year, according to figures published by the National Institute of Statistics (Spanish acronym: INE). This rate is two-tenths higher than in September and coincides with the figure advanced by the INE at the end of October. This increase in inflation can be explained by the majority of the main components of the CPI, except processed foods, the rate of inflation of which has remained constant.

In October, energy product prices were down by 13.1% year-on-year, compared with 13.6% the previous month. This reduced decline was due to solid and liquid fuels, which posted a moderation of eight tenths in their year-on-year fall to 15.6%. Electrical energy posted a year-on-year decline of 6.4%, up one-tenth on the previous month.

 

The year-on-year rate of change in non-processed food prices rose by one-tenth in October, to 2.7%, mainly due to fresh fruit. The annual rate of processed foods, beverages and tobacco remained constant at 1.4% for the third consecutive month. Oil continues to be the most inflationary heading of this group, with a year-on-year increase of 29%, although this rate has moderated in recent months and in October was half a point lower than in September

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Core inflation (which excludes the most volatile components of the CPI such as fresh food and energy) rose by one-tenth in October, to 0.9%. This slight increase stems from the prices of non-energy industrial goods and services, which rose by two-tenths and one-tenth respectively, to stand at 0.6% and 1%. This higher rate of non-energy industrial goods responds to the price of automobiles and clothing and footwear, and services, telephony services and interurban public transport, particularly the heading of air transport which, albeit with lower prices, is not as low as in the same month of 2014.

 

In month-on-month terms, the CPI rose by 0.6% in October. This rise stems from a 3.2% increase in non-energy industrial goods, particularly the heading of clothing and footwear, which posted a month-on-month increase of 11.1%, due to its seasonal nature deriving from price setting for the autumn-winter season. This rise also stems from non-processed foods (up 1.3%), due to fresh fruit (up 3.8%) and fresh legumes and vegetables (up 3.4%), and, to a lesser extent, to processed foods (up 0.1%), particularly oil (up 3.7%).

 

The annual inflation increased in all autonomous regions, with the exception of Asturias which continued to stand at -0.9%. Those with the highest annual rate of CPI were the Balearics (-0.2%), Catalonia (-0.3%). And the Basque Country (-0.4), while those registering lower rates were Extremadura, Castile La Mancha, Castile and Leon and Cantabria which all stood at -1.2%. Meanwhile, the annual CPI rate at constant taxes stood at -0.7% in October, the same as the general CPI.

 

The INE also published the harmonised CPI (HCPI) for October, the year-on-year rate of which stands at -0.9%, two-tenths higher than the previous month. If we compare this rate with that estimated by Eurostat for the Eurozone as a whole in October (0.0%, compared with -0.1% in September), the positive inflation differential for Spain would fall by one-tenth to -0.9 percentage points.