Inflation slows to 3.2% in November due to lower fuel prices and containment of food prices

Inflation has given the Spaniards' pockets a break in November. According to the provisional advance released this Wednesday by the National Institute of Statistics (INE), the CPI has moderated three tenths in the last month to register an interannual variation rate of 3.2%, favored by the lowering of fuel prices and the containing increases in food.

The slowdown in prices noted in November represents a positive variation in the CPI with respect to the interannual rate of 3.5% at which the data had been stagnant for two months, after having returned to increases in the second half of the year from 1 .9% registered in June. This means that, although prices continue to rise, they do so at a slower pace and far from the levels of a year ago, when in November 2022 inflation reached a rate of 6.8%. Compared to October, prices have decreased by 0.4%.

“The advance CPI data for November is very good news,” said the First Vice President and Minister of Economy, Nadia Calviño, who highlighted that “salaries continue to gain purchasing power and Spanish companies, competitiveness.”. The inflation data for November closes the period with which the increase in contributory pensions is calculated to adjust them to the CPI. If the advance is confirmed, the increase in 2024 would be 3.8%. Also currently on the table is the increase in the minimum wage, which could take inflation as a reference, according to the Minister of Labor, Yolanda Díaz, last week.

The INE attributes the drop in inflation in November to a decrease in the price of fuel and tourist packages, as well as a slowdown in food prices, which would have become less expensive in the last month than expected. they did in November 2022. On the other hand, the statistical institute points out that the behavior of electricity has been worse than that recorded a year before, when its price fell by 22.4%.

While waiting to know the complete breakdown of the November inflation data by product categories – which will be published on December 14 along with the final reading of the general index – the CPI for food grew by 9.5% in October. Although it still remains well above the general index, the inflation of these essential products has experienced a pronounced moderation so far this year, after peaking in February when it reached a rate of 16.6%.

Core CPI down

The containment of food prices has been reflected in the behavior of underlying inflation, which is what discounts the price of energy and unprocessed food from the calculation due to their high volatility.. Specifically, the core CPI slowed down in November, registering a year-on-year variation rate of 4.5%, seven tenths below the 5.2% recorded in October.

This is the fourth consecutive month in which core inflation moderates its growth. The index has thus registered its lowest mark in more than a year, since it stood at 4.4% in April 2022.. At that time, the indicator was immersed in an escalation that peaked in February of this year, reaching an interannual rate of 7.6%.

Underlying inflation allows us to observe to what extent the rise in prices has spread to the economy as a whole, so its moderation in recent months is positive.. In fact, it is an indicator that is especially observed to calculate economic forecasts. Analysts like Funcas, for example, estimate that inflation will rise again to 3.5% in the first half of 2024. In that sense, the president of the European Central Bank, Christine Lagarde, warned on Monday that inflation will rebound in the coming months and insisted that it is too soon to “declare victory.