Degussa | Most people these days think inflation is a rise in consumer goods prices of more than 2 per cent per year – a result of what mainstream economics has been teaching generations of students all around the world. However, equating inflation with changes in consumer goods prices is inadequate and highly deceptive for various reasons.
The yearly rate of inflation dropped by seven-tenths of a percentage point in March to 0%, after a monthly decline of 0.4%. The result was very close to expectations, and was mainly thanks to the fall in energy products due to the oil price collapse. The main deviation occurred in unprocessed foods’ prices which were inflated due to the increase in fresh fish, vegetables and pulses.
Degussa | Wherever you look: Prices for consumer goods, real estate, stocks and bonds are on the rise. That means that the purchasing power of money is on the decline. For if, say, stock prices go up, your money unit can buy fewer stocks. What it also means is: While people holding assets, whose prices increase, become “richer”, people holding money get “poorer”
J.L. M.Campuzano (Spanish Banking Association) | The European Central Bank (ECB) published on Thursday the statistics for monetary aggregates in January. In January specifically, the growth rate accelerated to 5.2% per year. This increase in the M3 money supply continues to exceed the theoretical level compatible with medium and long-term inflation of 2%. The main contribution was from credit to the private sector, with an increase of 3.4% over last year.
Would inflation rates in the Eurozone increase, if owner-occupied housing costs were introduced? Analysts at DWS doubt it. They put more faith in wages, which play an important role in the price of services (excluding rents).
With a monetary policy that has already used up almost all of its ammunition, the only factor that could restart the inflation would be a powerful tax stimulus. There is a path that is not being given enough attention and that could well be the missing link: the sustainable tax stimulus.
Spain CPI stood at + 0.8% in December, following estimates and preliminary data. This means an increase of + 0.4%. In fact, inflation in Spain remains below the EU’ average (+ 1.3% in December), which allows the country to continue gaining competitiveness via prices.
BBVA Research | At the end of the year, the Spanish economy could register three quarters in a row of 0.4% growth t / t, below the growth observed since the beginning of the recovery (0.7% t / t, on average). In this context there is a stabilization of job creation, a volatile composition of demand and low inflation.
In Spain, the harmonized inflation rate in November stood at 0.5%, three tenths more than in October
Spain’s consumer price inflation hit the lowest in more than three years in September, according to data from the statistical office INE. The CPI edged up 0.1 percent year-on-year in September, following a 0.3 percent rise in August. This was the lowest rate since August 2016, when prices dropped 0.1 percent. The result, which coincides with some analysts’ forecast such as Funcas, is due to the fall in prices of energy products, especially gas and electricity.