Final CPI in Spain confirms 3.1% in December 2023 and core CPI 3.8%; gap between the two decreases +0.7 pp from previous +1.3

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Bankinter : Final CPI December 2023 confirms +3.1% year-on-year (from +3.2% year-on-year previous and expected). Underlying CPI also confirms +3.8% year-on-year (from 4.5% year-on-year before). In month-on-month terms, 0.0% month-on-month (from -0.3% month-on-month in November) and in the Underlying +0.2% month-on-month (from +0.1% month-on-month in November).

Assessment: No surprises, preliminary data are confirmed. This is fully in line with our estimates in Strategy 2024 (year-end +3.1% year-on-year and annual average +3.6% year-on-year). The spread between the Underlying and General Rate narrows to +0.7pp (from +1.3pp in November). We expect a slight year-on-year pick-up in January, although the withdrawal of inflation support will be more gradual in the year than anticipated (e.g. in January VAT on electricity rises to 10% from 5% and VAT on Gas will rise to 10% until March, but the VAT rebate/elimination on some basic foodstuffs is extended and public transport subsidies are extended). Our estimate for 2024 is 3% year-on-year on average and 2.3% year-on-year for 2025.

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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.