March 6, 2021

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

The consumer price index (CPI) stood at 0.4% per annum in June, a rate four tenths lower than that of May and the lowest since September 2016, due to the impact of the price of energy.

The National Institute of Statistics (INE) has confirmed this Friday that inflation in June was 0.4% after standing at 0.8% in May, a month in which it plummeted seven tenths compared to April.

The INE notes that the transport had a zero rate in June, almost two points lower than in May, due to the decrease in the prices of fuels and lubricants.

Also the fall in the prices of electricity and liquid fuels weighed down the house rate, which after experiencing a decline of more than one point was at 1.5% negative.

On the other hand, the summer season boosted the price of tourist packages, which increased the annual rate of leisure and culture by eight tenths of a percentage point, which in spite of this continues at a negative 0.4%.

In June, the price of hotels, cafes and restaurants increased by 2.2% in annual terms; that of education, 1%, and clothing and footwear, 0.9%.

At a more disaggregated level, the price of energy products fell by 2.6% in June at an annual rate and that of food without processing, by 1.4%, while the greatest increase was recorded by services with an index of 1.4%.

Core inflation, which does not take into account unprocessed foods and energy products as they are the most volatile, stood at 0.9%, two tenths more than in May and five tenths above the general rate.

In this way, in June, core inflation surpassed the general CPI for the first time since January 2018.

In monthly terms, prices fell by 0.1% in June compared to May, putting an end to four consecutive months of increases.

The groups that pushed down monthly prices were transportation -influenced by fuels-, clothing and footwear -through the impact of rebates- and housing -because of lower prices for electricity and gas- .

On the contrary, they boosted prices for leisure and culture, especially for tourist packages, and food and non-alcoholic beverages in the face of the increase in the price of fruit and meat.

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