Consumer price index (CPI) It fell to 3.3% on an annual basis in Marchalmost half of the previous month and almost three times less than a year ago, according to the leading indicator published by the National Institute of Statistics (INE). One of the factors contributing to this evolution is moderation electricity prices and fuels, as well as comparing with the increase recorded in March last year. All this brought the index to its lowest level since August 2021.
A year ago, the first blow ukraine warwith 3% monthly increase compared to the previous month, the highest level in 45 years. 12 months later the analogy supposedly accuses “step effect” and the overall index moderates without much effect, although the shopping cart remains high the abolition of VAT on most basic foods and 10% to 5% reduction in oils and pastes. Compared to February, CPI increased by 0.4%.
As a result of all this, Core inflationThe most structural, as it excludes energy and unprocessed food prices, fell by one-tenth from February to 7.5% for the first time since last September, according to the INE. Last month, food reached a record high of 16.6%placer Core inflation The variable most interested in the fight with 7.6%. The fact that this indicator remains at high levels indicates that the increase in shopping cart prices, which relieved the rise in energy prices months ago, which started the inflationary process in the wake of the war in Ukraine, continues.
Low inflation “in favor”, according to government sources Competitiveness of Spanish companieseven in the complex international economic context, as evidenced by the gains in market share and the increase in exports of goods and services”. The execution also attributes the fall in the overall level of prices to the effect of the gas ceiling for electricity generation, which will expire next May and will be extended until the end of the year after Brussels’ approval.
Analysts had expected a significant decrease in CPI in the first half of this year compared to the first half of 2022, which saw the big rise. In fact, they estimate that there is a ‘step effect’ or base effect.It will put significant downward pressure on inflation throughout the first half of 2023., according to analysis by CaixaBank Research. This gap will narrow in the second half of the year as the strong CPI growth concentrates in the first half of 2022 and remains fairly stable in the second half of the year.
The trend may be moderate in the coming months, after average inflation of 8.5%, the highest average inflation since 1986, and 2022, when annual inflation peaked at 10.8% last July. In its latest forecasts, the Central Bank of Spain not only raised its growth forecast for this year to 1.6%, but also lowered its inflation forecast to an average of 3.7%.
Combining the forecasts of 19 institutions and labor services, the Funcas panel, the basis of former savings banks, also calculated that this year’s inflation will average around 4%, which is around the 2022 average. According to Funcas, it will be 3.7% compared to 5.7% last year.
Core inflation, on the other hand, increased by five tenths and reached an annual average of 4.5%. Last month, it was 7.6% due to the effect of the shopping cart, which eased the energy prices, which started the rise.
This evolution led the European Central Bank (AMB), after the US Federal Reserve, to start his way interest increases as of last July. Since then, it has agreed to six hikes from 0% to the current 3.5%, and as a result one year euriborreference for variable rate mortgage.