The lower year-on-year fall in the CPI is due to a slower fall in energy prices, especially those of solid and liquid fuels and electricity. Within the service sector, tourism and hospitality industry prices also contributed to the inflation increase. In month-on-month terms, the general CPI rose by 0.5% in May, the same as in the same month of last year.
The price of energy products posted a year-on-year rate in May of -14%, 1.1 percentage points higher than in April. The slower fall was due to both electricity (the fall of which slowed by almost two points to -16.4%) and solid and liquid fuels (which slowed by 0.7 points to -13.5%). In turn, performance by the latter is due to a lesser decline by its two components: gas, the rate of which rose from -13.2% in April to -12.6% in May; and liquid fuels and lubricants, for which the price drop slowed by almost one point to -12.6%.
Inflation on food in May stood at 1.6%, two-tenths lower than the figure in the previous month, mainly due to trends in unprocessed food prices, the rate of which fell by 0.6 points to 2.6%. This deceleration was largely due to the price trend affecting fresh fruit. In turn, processed foods posted a rate of 1.1% in May, one-tenth lower than that posted in April.
Core inflation (excluding the most volatile components of the CPI, fresh foodstuffs and energy) remained at 0.7% in May due to a stable increase in the price of prepared foodstuffs (1.1%, one-tenth lower than in the previous month), non-energy industrial goods (NEIG, 0.4%, one-tenth less than in April) and services (0.8%, unchanged from April). However, the disparate performance of components within services should be highlighted. Tourism and hospitality industry prices rose by five-tenths to 0.4%, while communication prices fell by six-tenths to 1.8% due to the price of telephony services.
In month-on-month terms, the CPI grew by 0.5% in May, just as it did in the same month of 2015. This stability was in spite of energy product prices rising by 2.3% month-on-month, 1.3 percentage points more than in the same month of last year. In contrast, the remaining components of the general CPI posted lower or equal month-on-month rates in May than those posted a year ago. NEIG prices posted a month-on-month rate of 0.8%, one-tenth lower than the rate posted in May 2015, and food prices rose by 0.3% (0.5% last year) due to non-processed food (0.8%, compared with 1.4% a year ago). Meanwhile, processed food prices remained stable (0%, as was the case in May last year). Within non-processed food, it is worth highlighting the smaller increase in fresh fruit prices (7.8% in May 2016, compared with 9% last year).
In turn, service prices rose by 0.1%, as was the case in May 2015, due to disparate performance among its components. It is worth noting the stability of communication prices in May this year compared with the 1.6% increase last year and the almost unchanged price of tourism and hospitality industry services (0.1%) following a decrease of 0.4% in the same month last year.
The year-on-year CPI rate rose in most autonomous regions in May. Seven regions posted rates lower than the national average, with the lowest posted by Castile-La Mancha (-1.4%), Cantabria (-1.3%), Castile-Leon (-1.3%) and the Region of Valencia (-1.2%). Andalusia, the Region of Madrid and Murcia posted the same rate as the national CPI (-1%). Among the regions posting higher rates than the national CPI, the Basque Country and Catalonia posted the highest (both at -0.7%). The year-on-year CPI at constant tax rates for May stands at -1%, the same as the general CPI.
The INE has also published harmonised CPI figures for May, whose annual rate is -1.1%. This is one-tenth higher than in the previous month. If we compare this rate with the rate advanced by Eurostat for the whole of the Eurozone in this month (-0.1%), the inflation differential in Spain's favour remains at one percentage point.
In summary, the year-on-year CPI rate rose by one-tenth in May when compared with April due to a slower decrease in the price of energy products. The inflation differential in Spain's favour versus the Eurozone remains at one percentage point for the third consecutive month, with the resulting favourable impact on Spain's competitiveness and exports.
EFE