Inflation settled firmly in September, arriving at an annual rate of 9 percent and finishing a bit below the 9.5 percent level observed in August. This moderation comes after the preliminarily released CPI data from the National Institute of Statistics, which showed consumer prices dipping by about one-tenth from August. The sequential decline nudged the yearly rate down to 9 percent, underscoring a tangible improvement in price pressures after the summer peak and signaling a shift in the inflation trajectory that analysts and households will be watching closely. The path to this point was shaped by a mix of price movements across the baskets that make up the CPI, with electricity costs acting as the primary engine of moderation, according to INE’s Thursday briefing. This follow-through aligns with the broader narrative of cooling inflation as energy prices receded from earlier highs and consumer demand loosened somewhat in the late summer period. It is worth noting that the September print, while still elevated, marks a meaningful deceleration from the mid-year pace, offering relief to households grappling with higher living costs and helping to set expectations for policymakers and financial markets into the fall. The data points to a moment of recalibration in price dynamics, where the inflation story shifts from rapid escalation to a more gradual, albeit persistent, rate of advance across broad categories of goods and services. INE highlights this as a crucial sign that the inflation peak may be behind the economy, though the road to a stable, low-inflation environment remains uneven and dependent on energy, supply chains, and external demand conditions.
The advance indicator released by INE on Thursday still requires formal confirmation by mid-October, with the 14 October date anticipated for finalization. If confirmed, this reading would constitute the lowest inflation rate registered since June of last year when rates exceeded 10 percent, marking a notable turn in the inflation cycle after a long period of strength from energy and other price drivers. While the core components of the CPI will be laid out in greater detail by mid-October, the September moderation is expected to be driven primarily by the decline in electricity prices, which had surged in the prior year as a factor of energy market conditions. The easing in electricity costs appears to have provided significant relief for consumers, offsetting some of the ongoing upward pressure from other categories and reflecting a broader trend toward cooling demand and stabilizing prices in essential utilities.
Similarly, while transportation costs and fuel prices showed some movement compared to the same month last year, the changes were less pronounced than the electricity-driven effect. Annual changes in those areas contributed to the overall inflation path, but to a lesser extent than the energy component, underscoring that energy-related volatility remains a principal driver of inflation dynamics. In parallel, the measure of core inflation — which excludes the most volatile items such as unprocessed food and energy — also declined, easing by two-tenths to 6.2 percent. This softer core reading suggests that underlying inflationary pressures were cooling even as energy-driven volatility persisted in the headline figure. Market participants will watch closely for any signs of persistence in core inflation, as this will influence expectations about monetary policy and interest rate paths in the coming months. The evolving picture indicates a cautious optimism that inflation could continue to ease, provided that energy prices stay favorable and that broader demand continues to moderate without reigniting price pressures in services and non-tradables. The September data set a foundation for future revisions and a more confident assessment of the inflation trajectory as the year progresses, inviting analysts to scrutinize the components in October’s detailed report for a clearer view of the forces shaping prices across households and businesses alike.