Bad News: CPI Soars To 6.7% In December, Almost At 30-Year Highs

spain red light

Bankinter : Preliminary December CPI +6.7% YoY rises strongly from 5.5% previously and well above the 5.6% expected. The underlying rate stands at 2.1% YoY in December (preliminary) from 1.7% previously. According to the INE, the advanced figure for December would be the highest CPI rate since March 1992. Of note in this behaviour is the rise in the price of electricity, higher this month than in December 2020. Also influential, albeit to a lesser extent, is the increase in food prices, compared with the decline recorded last year.

Meanwhile, the estimated annual rate of change of core inflation (general index without unprocessed food and energy products) increases by four tenths of a point to 2.1%, which is almost five points below that of the general CPI.

The analysis team’s opinion: Bad news. The figure is well above our estimates (5.7%). Looking ahead to 2022, we expect inflation to moderate, especially in the second half of the year, to close at levels of around 2%.

About the Author

The Corner
The Corner has a team of on-the-ground reporters in capital cities ranging from New York to Beijing. Their stories are edited by the teams at the Spanish magazine Consejeros (for members of companies’ boards of directors) and at the stock market news site Consenso Del Mercado (market consensus). They have worked in economics and communication for over 25 years.