September 23, 2020

The CPI falls to 0.6% in July and adds four consecutive months in negative

The drop in prices intensified in July with a 0.6% decrease compared to the same month of 2019, a fall three tenths higher than that of June, mainly due to the cheaper accommodation and restaurant services.

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According to data confirmed this Thursday by the National Institute of Statistics (INE), the consumer price index (CPI) has now been negative for four consecutive months, with decreases in April (0.7%), May (0.9% ), June (0.3%) and now July (0.6%).

Prices have been pressured downwards by the evolution of hotels, cafes and restaurants, whose index fell one and a half points, to 0.3%, mainly due to accommodation services.

The lower rise in the prices of food and non-alcoholic beverages – 2.2%, six tenths less than in June – also influenced the lower prices of fruits, legumes and vegetables.

Along with this, the prices of communications fell by 1.2%, with which the rate was almost two points below that of June, and those of leisure and culture, by 1.1%, which placed its rate eight tenths lower than the previous month due to pressure from tourist packages.

On the contrary, the evolution of transport pushed the index up, since although its prices fell by 4.5%, this decrease was seven tenths less intense than that of June due to the increase in the price of fuels and lubricants for personal transport.

Core inflation -which does not take into account the prices of food or energy products as they are the most volatile- stood at 0.6% in July, which is 1.2 points above the general index.

The INE has also published the prices of COVID-19 goods and services, an indicator created to analyze the evolution of the products most consumed by households during the pandemic.

COVID-19 goods -which include food, beverages, tobacco, cleaning or pharmaceutical products- became more expensive by 1.8% in July, five tenths less, due to the cheaper fruits, legumes and vegetables.

COVID-19 services -which include home and garage rental, water distribution, electricity, diesel for heating, bank commissions or online television- fell by 2.9%, five tenths more than in June, due to the decrease in telephone services.

In July, prices fell in all the autonomous communities except in the Canary Islands, where they rose 0.7%, especially in Navarra and La Rioja, with falls of 1.3% and 1%, respectively.

Regarding the monthly evolution, prices fell 0.9% in July compared to June, due to the lower prices of clothing, footwear, accommodation services and passenger air transport.

The harmonized consumer price index (HICP) – which allows international comparisons – fell in July by 0.7% in annual terms and by 1.6% in monthly terms.

The INE clarifies that, once the state of alarm has ended, the face-to-face collection of price data has been resumed, although telematics is maintained in some cases, and the price of products that were not available for purchase has stopped being estimated. purchase in recent months.

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