inflation rate

September figures show that prices are recovering in Catalonia, with inflation posting a 0.1% rate in annual terms. According to figures released by the Spanish Institute of Statistics (INE), Catalonia is showing a positive inflation of 0.1%, up from the -0.1% recorded in August, running away from a deflation scenario. While in Spain, there is a negative annual rate of -0.2%, although it improves the August rate of -0.5%. Overall, prices showing a positive recovery rates were in the sales of fresh fruit and housing. Inflation figures are promising throughout Catalonia, although data is uneven in the provinces of Barcelona, Girona, Lleida and Tarragona showing different positive signs of price stabilizing and positive annual inflation.

In Catalonia prices fell by 8 decimal points this July compared to a year ago and interanual inflation rate stood at 0%, according to the Spain's Statistical Institute (INE). This is a contrast to Spain as a whole, where prices fell by 9 decimal points in July, placing the Consumer Price Index (CPI) in negative figures, as low as -0.3%. This level of negative inflation has not been recorded in the country since September 2010, when the CPI lay at -0.7%. This contrast in inflation rates indicates that the Catalan CPI is able to resist falling into negative numbers, despite what has happened to Spain's economy this year, which already registered negative CPI statistics this March. 

The so-called Consumer Price Index (IPC) – which represents the inflation rate – in May stood at 0.5% in Catalonia in annual terms. In April, it stood at 0.7% according to figures published on Friday by the Spanish Institute of Statistics (INE). Across the whole of Spain, inflation increased by 0.2% in May, while in April a 0.4% inflation rate was recorded, the IPC data confirms.  Core inflation – which does not take into account the prices of energy and unprocessed food –  fell from 0.3% in April to 0.0% in May. The product groups that had a greater impact on May's IPC were food and non-alcoholic beverages (-0.8%), recreation and culture (-1.1%) and hotels, cafes and restaurants (+0.5%).

Rating agency Moody’s warns that Catalan independence from Spain might have “a major adverse impact on Spain’s economy” but also that “Catalonia itself could also suffer” if the break–up is not friendly. In a forecast about the Spanish economy published this week, the New York-based company analyses potential risks that might damage the expected economic recovery. Moody’s praise the high level of exports, based on a higher competitiveness reached by lowering salaries. However, the report, signed by Zach Witton, highlights that “debt reduction by households and businesses, elevated unemployment, the housing market correction, and tight credit will drag on growth”.

By the end of December, Catalonia registered a 0.2% annual inflation rate, according to the Spanish Statistics Institute (INE). This figure is the lowest recorded in Catalonia at the end of the year since December 1978, when the INE started providing figures for each of the Autonomous Communities. In the whole of Spain, prices ended 2013 posting an annual inflation rate of 0.3%, the lowest registered on a month of December since 1961; the very year such figures started being released. However, these are not the lowest annual inflation rates, since the record was set in July 2009, with a -0.9% annual rate in Catalonia. In monthly terms, prices increased by 0.2% in December in Catalonia on November figures and by 0.1% in the whole of Spain. The price increase was mostly due to the growth in oil prices, while leisure, culture and clothing helped minimising the general increase.

This October, prices are 0.1% cheaper than they were a year ago, in October 2012, according to the advanced inflation rate released by the Spanish Statistics Institute. If this is confirmed, annual inflation rate would have gone from +0.3% in September to -0.1% in October. Prices of food and non-alcoholic drinks fell and the increase in university education fees was slight. Last year, university tuition fees doubled as one of the austerity measures adopted to reduce public deficit. Regarding monthly changes in the overall inflation rate, prices increased by 0.4% between September and October.

According to a figures released by the Spanish Institute of Statistics (INE), Catalonia’s annual inflation rate fell from 2.6% to 2.1% between June and July. This is the second lowest annual inflation rate that Catalonia has experienced this year, with the lowest being during April when the figure was 1.8%. July’s annual inflation rate in Catalonia is higher than that of the whole of Spain, which is set at 1.8%. The main reason for this fall on last year’s results can be explained because of the lower rate of increases in electricity prices (compared to last year’s rise), as well as the end of the statistical effect of the pharmaceutical co-payment, which was implemented in July 2012 and significantly raised the consumer price of drugs.

Combined with the salary reductions and the taxation increase, the rise in inflation means that Catalans have lost purchasing power. The spending of the average Catalan family increased by some 110 euros per month compared to 2011 in order to buy the same amount of goods and services, while the net revenue decreased. In the whole of Spain, the inflation rate for the last 12 months was 2.9%, affected by the VAT increase approved by the Spanish Government. In Catalonia, it was higher due to fees adopted by the Catalan Government in order to reduce the public deficit: namely those affecting drug prescriptions and university education.

The Catalan Government’s drug prescription fee and the Spanish Executive’s decision to make citizens pay for a greater share of prescribed drugs have had an effect on inflation. The price of pharmaceutical products has had its highest increase since at least 2003.

In the three first months of the year, the inflation rate remained stable in Catalonia. The monthly price increase, which is the highest since October 2010, is mainly due to the end of retail sales and the oil price increase. In Spain, prices increased by 0.7% in March, while the annual inflation rate was set at 1.9%.

The 2011 price increase is 0.5 percentage points below the 3% inflation rate of 2010 thanks to a drop in the price of fuel and oil and the leveling off of tobacco prices. Inflation in December 2011 was 0.2 points higher compared to December 2010.

Prices have increased by 3% over the past 12 months. This represents a fall in the annual inflation rate compared to that registered in October (3.1%). In Spain as a whole, November’s annual inflation rate was set at 2.9%. The decrease in the price of medication and fuel is behind the slight annual price reduction. However, in Catalonia the monthly inflation rate increased in November by 0.4% compared to those registered in October, mainly due to an increase in the price of clothes.

Comparing the annual inflation rate registered in August, prices increased from 3.0% to 3.2%, after four consecutive months of drops. For the whole of Spain, the annual inflation in September was 3.1%.

Brussels believes it is "unlikely" to relapse into a second recession but warned that the possibility "can not be excluded". The European Commission has not lowered its growth forecast for Spain or the whole of the Euro area despite the financial turbulences of the last weeks.

The inter-annual rate shows four consecutive months of price decline which has not been seen since November 2008.