Thursday, December 8

Inflation moderates to 9% in September, 1.5 points less, due to the drop in fuel and electricity

The Consumer Price Index (CPI) decreased six tenths in September in relation to the previous month and suddenly cut its year-on-year rate by 1.5 points, to 9%, dropping from double digits after having chained three consecutive months above 10%, according to advanced data published this Thursday by the National Institute of Statistics (INE).

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The data for September, which must be confirmed by Statistics in the middle of next month, is 1.8 points lower than the ceiling of this price crisis due to the Russian invasion of Ukraine, 10.8% in July, its highest level since September 1984, compared to the same month of the previous year. With this moderation of 1.5 points, inflation adds two consecutive months of declines in its year-on-year rate after falling three tenths in August, to 10.5%.

According to the INE itself, the moderation in the year-on-year CPI to 9% is mainly due to the drop in electricity prices and, to a lesser extent, to lower fuel and transport prices. Sources from the Ministry of Economic Affairs argue that “the reduction in inflation highlights the positive impact of the measures put in place to cushion the rise in prices, especially those aimed at promoting public transport.”

“Despite the tensions in the energy markets, the downward trend in inflation will continue in the coming months, in the absence of new events,” they continue from the Ministry headed by Vice President Nadia Calviño.

Biggest monthly drop since July 2021

In monthly terms (September compared to August), the CPI registered a decrease of six tenths, its biggest drop since July 2021, when it fell eight tenths.

And even better news, if possible, is that core inflation (the CPI calculation that excludes energy and unprocessed food, and which is considered less volatile and more structural) fell two tenths in September, to 6.2%, reaching almost three points below the general CPI.

This is the first drop recorded by core inflation after fourteen consecutive months of increases, which led this index to reach its highest level last month since January 1993 (6.4%).