Core inflation has risen to 6.9% and is already above the general consumer price index


Inflation took a break in December and closed the year at 5.8%. A figure that is one point lower than the previous month and leaves the annual average at 8.4%. The downward trajectory continues in our country, but with a warning signal: no Primary CPI. This rises six-tenths to 6.9% and comfortably exceeds the general index, with all eyes on rising food prices.

The downward trajectory began in August, but from levels not seen in four decades. And the summer season ended with the index exceeding dozens, and in the eighth month of the year the decline began, which continues today. CPI fell in August by three-tenths to 10.5%; in September it fell to 8.9%; in October 7.3%; in November 6.8%; And now in December, according to the leading indicator, at 5.8%. The fifth consecutive month of decline, although it does not prevent an annual inflation rate of more than 8%.

In the case of the last month of the year, electricity and fuel pushed the index down again. Something that had already happened in recent months in the midst of falling energy prices. On the other side, Clothes, shoes, tobacco and processed foods Affected the consumer price index upwards.

The most worrisome thing about December’s numbers is found in core inflation, which is the overall index without unprocessed food and energy products. This shows that the price problem in the shopping cart is still very present in Spain. In this sense, it is the sixth month in a row that this figure has been over 6%; It is even close to 7%.

In fact, this is the first time since February 2021, before the war in Ukraine and in the midst of Covid-19, that the core CPI exceeds the general one. Likewise, this was not much higher (1.1 points) than the public data since October 2020.

These figures come a few days after the government approved a new package of measures to deal with the energy and inflation crises. In this case, the great novelty was the reduction of VAT on some of the basic products in the shopping cart, with the exception of meat and fish.

Some products such as fruits, vegetables or eggs are converted from 4% to 0% VAT. On the other hand, pasta and oils, which hitherto supported a 10% tax, will now have a 5% rate. Thus, this will be maintained as a rule until June 30, but, as ABC has published, there is a factor that could lead to its unraveling. The measure will decrease if the core inflation rate falls below 5.5%.

However, the data does not show that the core CPI will reach this figure in the very short term. In July, it topped 6% for the first time and has already been holding above that level since then. It stagnated for two months at 6.2% in October and November and has now seen a new high in the latter part of the year.

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