The CPI plummets five tenths in December, up to 1.2%, due to the drop in fuel prices

The CPI plummets five tenths in December, up to 1.2%, due to the drop in fuel prices


The Consumer Price Index (CPI) fell by 0.4% in December compared to the previous month and cut its interannual rate by five tenths, up to 1.2%, its lowest level since last month of openingl, according to the leading indicator published this Friday by the National Institute of Statistics (INE).

The statistical agency has blamed the decline in the year-on-year rate of the CPI to cheaper fuel prices (diesel and gasoline).

The interannual rate for December, if confirmed, would be the twenty-eighth positive rate that links the year-on-year CPI and implies that prices are now 1.2% higher than those of a year ago. After six months above 2%, in the penultimate month of the year the CPI fell from that barrier, a trend that has continued in December, and placed at its lowest level since April.

The Ministry of Labor has already explained that this year the new rate of revaluation of pensions, with the average November 2018 on December 2017, to avoid the loss of purchasing power of pensioners and compensate the difference of the rise in pensions with the rise in the CPI. According to the Government, pensions this year rose by 1.6% and minimums by 3%.

However, with the new revaluation methodology, the average of November of this year on December of last year is 1.7%, so that pensioners will be compensated with an additional 0.1% pension increase. , which will cost around 256 million euros for public coffers.

In the last month of 2018, the Harmonized Consumer Price Index (HICP) placed its interannual rate at 1.2%. If this data is confirmed, the annual rate of the IPCA would be reduced by five tenths with respect to the previous month.

In monthly terms, the CPI fell by 0.4% in December. On the other hand, the monthly variation of the leading index of the HICP stood at -0.5% in December.

The INE will publish the final CPI data for December next January 15.

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