According to the preliminary estimate from the National Statistics Institute (INE), the CPI slowed down in September in Spain to 1.5% year-on-year, decreasing below the minimum reached in June 2023 (1.9%) to mark the lowest figure since March 2021. The increase in the core inflation rate also moderated, in this case by three tenths (compared to eight in the CPI), down to 2.4%, the lowest since January 2022. The INE indicates that the moderation was due to fuel prices and, to a lesser extent, to electricity, food, and leisure services prices.
The month-on-month data shows a strong containment compared to what is usual in other September months, as the CPI was seven tenths below the average of the previous twenty years and the core rate was five tenths lower. The base effect will become upward in October and November, but it may be countered by energy prices if oil remains around current levels, as they are nearly 20% lower than in the same period of 2023. In this way, price data in Spain may be positioned for the remainder of 2024 at levels close to the European Central Bank’s target, paving the way for interest rate cuts, although it remains to be seen how wages and service prices evolve, which have been their main sources of concern throughout the year.
Spain’s preliminary CPI drops to +1.5% year-on-year in September from +2.3% in August
