The Consumer Price Index (CPI) rose by a year-on-year 0.1% in June according to figures published by the National Statistics Institute (Spanish acronym: INE). This rate is the same as the one advanced by the INE at the end of last month and is higher by three tenths than the figure posted in May. This price rice is mainly due to the upward trend in food prices, especially non-processed foods, energy prices and NEIG (non-energy industrial goods) and, to a letter extent, services. This is the first time that inflation has been positive since a year ago, but we are talking about very moderate increases that reflect the improvement of the economic situation in general and the recovery of consumption in particular.
Energy product prices in June posted a year-on-year drop of 5.7%, up by 0.7 points on the previous month. This moderation of the decrease was mainly due to electrical energy results, up by a monthly 4.6% versus the 2.1% decrease the previous year. The year-on-year rate was up by 3.5%, versus -3.2% last May. Electricity alone was responsible for over one tenth of the global inflation increase; conversely motor and heating fuels fell by 0.7% in the month, dropping the year-on-year rate by 1.4 percentage points to -9.1%. The year-on-year change in unprocessed food prices grew by 0.9 percentage points in June to 3.2%. This increase is mainly due to fresh fruit prices and prices of other foods such as fresh fish and potatoes.
Core inflation (which excludes the most volatile components of the CPI such as fresh food and energy) grew in June by one tenth to 0.6%. This growth was due to the upward trend of all the major components, especially the NEIG which was up by two tenths year-on-year, to 0.3%, as a result of the improved performance of the automotive industry, up by half a point to 3.5%, and of the clothing and footwear sector, also up by one tenth to 0.5%. Processed food was up by three tenths year-on-year to 1.2%, due to the inflationary pressures of cooking oil whose year-on-year price growth rate was up by five percentage points to 21.9%.
Group service prices grew by an annual 0.7%, one tenth better than the previous month. This improvement was due to tourism and hospitality, with an annual rate of over one tenth, to 1.2%.
In quarter-on-quarter terms, the CPI grew by 0.3% in June, versus zero growth in the same month of 2014. This growth is due to rising unprocessed food prices, especially fresh fruits (7.3%), fresh and frozen fish (1.7%) and potatoes (3.4%), partly offset by falling prices of pulses and fresh vegetables (-4.8%). It was also due to energy products (0.7%), as a result of increasing electricity prices (4.6%) and services, especially package holidays (4.2%).
The annual CPI rate in June increased in all autonomous regions. In five regions it is higher than the national figure: the Balearic Islands (0.4%), Catalonia (0.3%) and the Region of Valencia, the Basque Country, and La Rioja (0.2%). The inflation rate of the Region of Madrid is the same as the national rate. In the other autonomous regions, inflation is below the national average, in particular Extremadura, Castile-La Mancha and the Canary Islands, at -0.3. Meanwhile the annual CPI at constant taxes at June stood at 0.1%, the same as in the general CPI.
The INE has also published the harmonised CPI (HCPI) for June, which stands at zero versus -0.3% the previous month. If we compare this rate with that estimated by Eurostat for the Eurozone as a whole in June (0.2%), the inflation differential with Spain would be four tenths less, at 0.2 percentage points.
In short, the annual CPI rate of variation has increased in June by three tenths, due to the evolution of all its major components, in particular the most volatile: non-processed foods and energy products. Core inflation has grown by one tenth to 0.6%. The upward trend of prices therefore prevails, albeit at low levels. Our inflation continues to be lower than that of the Eurozone, with the consequent positive effect on the competitiveness of the Spanish economy, which will continue to benefit exports, production and employment.
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