March 4, 2021

Inflation drops to 0.4% in June, the lowest rate since September 2016 – La Provincia

TheConsumer Price Index (CPI)fell by 0.1% in June compared to the previous month and cut its interannual rate four percentage points to 0.4%, its lowest level in almost three years, according to the final data published this Friday by the National Institute of Statistics (INE), which coincide with the advanced ones at the end of last month.

Statistics has attributed thedecline in the year-on-year rate of the June CPIto the fall in the prices of gasoline, electricity and liquid fuels.

The year-on-year rate for June is the thirty-fourth positive rate for the year-on-year CPI and implies thatprices are now 0.4% higher than those of a year ago.

With the data of June, the interannual CPI chains two consecutive months of promotions after May went down seven tenths of a blow. With the four tenths in which it declined in June, a 1.1 point cut is accumulated in just two months.

However, theUnderlying inflation,that does not include the prices of energy products or unprocessed foods, advanced two tenths in June, to 0.9%, which is five tenths above the general CPI. The INE highlights that core inflation did not exceed the general CPI since January 2018.

In the sixth month of the year, theHarmonized Consumer Price Index (HICP)placed its annual rate at 0.6%, three tenths less than in May.

According to the INE, among the groups that contributed in June to the moderation of the interannual rate of the CPI arehousing, which cut its annual rate by more than one point,up to -1.5%, due to the lower cost of electricity and liquid fuels, and transport, whose annual rate dropped almost two points, to 0.0%, due to the reduction in fuel prices.

On the other hand, the leisure and culture group increased its interannual rate by eight tenths in June, to -0.4%, due to the increase in tourist packages, which was higher than the one experienced in the same month of 2018.

In monthly terms, the CPI fell by 0.1% in June, its largest decrease this month in at least five years.

This cut is mainly due to thedecreases in clothing and footwear prices (-1.3%)for the start of the summer sales; of transport (-1.4%) for gasoline, and housing (-0.6%), due to the reduction in electricity prices.

On the contrary, the leisure and culture group raised the prices in the month by 1.7% for theexpensive travel packages,and food increased its monthly rate by 0.4% due to the rise in the prices of fruits and, to a lesser extent, of meat.

Potatoes, 9% more expensive than a year ago

By rubrics, the ones that increased their prices in monthly rate were thefresh fruits (+ 5.7%),interurban public transport (+ 3%) and tourism and hospitality (+ 1.4%).

On the contrary, the greatest monthly decreases were recorded in oils and fats (-2.3%), fresh and frozen fish (-2%) and women's clothing (-1.4%).

In year-on-year terms, the headings that experience the greatest price decreases areoils and fats (-14.6%),fresh fruits (-7.4%) and heating, lighting and water distribution (-4.2%).

On the opposite side, the highest price increases in the last year are experienced by potatoes and their preparations (+ 9%), fresh vegetables (+ 7.1%) and pork (+ 4%).

The interannual CPI drops in all the Autonomous Communities

The annual rate of the CPI fell in June in all the autonomous communities. The greatest decreases were registered in Cantabria and Castilla y León, with declines of six tenths. On the other hand,The Canary Islands and the Basque Country experienced the lowest falls,with a drop of two tenths in its annual rate.

The regions with the highest annual CPI rates in June were Navarra (1%) and País Vasco (0.8%).

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