Spain Inflation Could Rise To 2% In 2017

Strong fall in Spanish inflationFoodstuffs inflation rate reduced three decimal points to 8 year lows (1.5%)

Spanish think tank Funcas said this week it forecasts an average annual inflation rate in Spain of 1.5% in 2017, although it is feasible that this could reach 2% in one month or other during the first half of next year due to factors like the uptick in oil prices.

But in spite of higher inflation and the fact that Spanish prices may reach the same level as those in the Eurozone as a whole from time to time in 2017, Funcas believes that Spain will maintain its competitiveness in exports and imports next year. That’s because for there to be any loss in this area the negative differential with the Eurozone needs to be “persistent and more structural.”

Fernández also said that Spain’s underlying inflation remains favourable. For that reason, she insisted on not predicting for the time being any economic fundamentals which would lead to a sustained increase in inflation above that in the Eurozone.

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