Inflation moderates in July by 0.1% to 2.2%, due to inflation and services

2018.8.14

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This trend can be explained by the deceleration of food prices and, to a lesser extent, services. Core inflation, which excludes the most volatile components of the CPI, fell by 0.1% to 0.9%. In month-on-month terms, the CPI posted a 0.7% decline in July 2018, the same figure as in the same month of 2017.

Energy product prices rose in July by 11.2% year-on-year, 1.3 points more than in June, mainly due to electricity price rises of 2.7 points to 8.1% and, to a lesser extent, the 1.4% increase in gas prices, after a 1.6% fall posted the previous month.

Food price inflation in July stood at 1.9%, 0.6% less than the previous month. Unprocessed food prices rose by 4%, almost 1.5% less than in the previous month, mainly due to the 4% fall in the price of fresh fruit and vegetables. Processed food, drinks and tobacco prices declined by 0.2% to 0.8% year-on-year, with a significant fall in olive oil prices, down 5 points to 7.2%.

Core inflation (which excludes unprocessed food and energy products - the most volatile elements of the CPI) also shrank slightly in July, by 0.1% to 0.9%. This fall is mainly due to the price of services, which declined by 0.1% to 1.5%, as a result of a significant reduction of 2.4% year-on-year in tourism services, after rising by 3.7% the previous month. In turn, the price of non-energy industrial goods (NEIG) levelled out, after falling by 0.1% the previous month.

In month-on-month terms, the CPI posted a fall of 0.7% in July 2018, the same figure as in July 2017, with a 3.7% drop in NEIG prices (the same as in July 2017) and a 0.6% drop in food prices (zero in July 2017) and a 0.6% drop in services (0.7% in July 2017). Within the food category, the prices of unprocessed foods fell by 1.7% month-on-month (-0.4% in the same period last year) and of processed foods by 0.1% (a rise of 0.1% in July 2017).

The year-on-year CPI rate rose in July in five autonomous regions, with noteworthy rises of 0.2% in Asturias (to 2.4%) and in La Rioja (to 2.3%), remained the same in seven regions and fell in the other five regions, with noteworthy falls of 0.2% in the Balearic Islands (to 2%) and the Canary Islands (to 1.6%).

The year-on-year CPI at constant taxes in July stood at 2.3%, 0.1% higher than posted by the general CPI.

The INE also published harmonised CPI figures (HCPI) for the month of July, with a year-on-year rate of 2.3%, the same as in June. Meanwhile, the rate advanced by Eurostat for the Eurozone in July is 2.1%.

Non official translation