Inflation climbs to 1.8% due to unprocessed food prices

Inflation climbs to 1.8% due to unprocessed food prices

In September 2017, the Consumer Price Index (CPI) rose by 1.8% year-on-year, the same as the rate advanced by National Statistics Institute (INE) at the end of last month, and two tenths higher than August’s figure, according to data published by the National Statistics Institute .

This was mainly due to rising prices of unprocessed food after their drop in August and, to a lesser extent, due to higher prices of services and non-energy industrial goods (NEIG), partly offset by the slower growth rate of energy products and processed food prices. In month-on-month terms, the CPI grew by 0.2% in September 2017, compared with zero change in the same month of 2016.

Energy product prices increased by 5.8% year-on-year, five tenths less than in August, due to a slower rate of growth of electricity prices (from 5.4% year-on-year in August to 4.4% in September) and of gas prices (down by 1.2 points to 11.4%). Meanwhile, prices of fuels and lubricants accelerated by one tenth to 5.5%.

Food inflation stood at 1.3% in September, one point higher than the previous month. Prices of unprocessed food grew by 2.2%, after dropping by 1.6% the previous month, mainly due to fresh fruit prices, whose downward trend moderated by 12.1 points to 2.7%, and, to a lesser extent, to the price of pulses and fresh vegetables, up by 6.5 points in September to 8.6%. Prices of processed food, drinks and tobacco grew by 0.9% in September, two tenths less than in August.

Core inflation (which excludes the most volatile elements of CPI, fresh food and energy products) remained at 1.2% in September, due to the deceleration of processed food prices offsetting the acceleration of services and NEIG prices. Services prices grew by 1.8% year-on-year, one tenth more than in August, driven by the performance of package tour prices, up by 2.6 points to 8.8%, and interurban public transport prices, up by 1.8 points to 4.3%. Meanwhile, NEIG prices increased slightly in September (by 0.1%) after being unchanged the previous month.

In September 2017, the CPI increased by 0.2% in month-on-month terms compared to the zero change recorded in the same month of 2016. By components, services prices dropped by 0.7%, one tenth less than the previous year, NEIG prices grew by 1.4%, one tenth more than in September 2016, food prices rose by 0.2% (-0.8% the previous year), and energy product prices increased by 1%, five tenths less than in September 2016.

Within the food category, in September 2017 prices of unprocessed food grew by a month-on-month rate of 1.2% (-2.6% in the same month of 2016), while processed food prices dropped by 0.2% (0% the previous year).

The year-on-year CPI rose in September in 12 autonomous regions and remained unchanged in the other five. The greatest increases were seen in the regions of Madrid (up by four tenths to 1.8%), Andalusia and Valencia (both up by three tenths to 1.8%). The regions with CPI rates unchanged from August were Cantabria (1.8%), Galicia (1.8%), Castile and Leon (1.7%), Asturias (1.5%), and the Canary Islands (1.4%).

The year-on-year constant tax CPI rate for September stood at 1.8%, the same as the general CPI.

The INE has also published the harmonised CPI (HCPI) for September, with a year-on-year variation of 1.8%, two tenths lower than in August. Meanwhile, the rate advanced by Eurostat for the Eurozone was 1.5% in September, the same as the previous month, giving rise to an inflation variable favourable to Spain over the Eurozone by 0.3 points, two tenths lower than August’s figure.