February 2, 2023

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Spain’s 12-month inflation slows again in December to 5.8% by Reuters

©Reuters. FILE PHOTO: A shop assistant shows a bag to customers at a shoe store in Ronda, Spain, December 13, 2022. REUTERS/Jon Nazca

(Reuters) – Spanish consumer prices rose 5.8% in December – the slowest this year thanks to lower year-on-year electricity prices, flash data from the National Institute of Statistics (INE) showed on Friday.

Still, core inflation, which excludes volatile fresh food and energy prices, came in at 6.9%y/y, up from the 6.3% recorded a month ago, INE data showed.

In November, Spain had the lowest inflation in the 27-member European Union at a rate of 6.7%, after peaking at around 11% in July.

“We’re reading very positively. Five points in five months… Core inflation is taking longer to fall because it took longer to rise,” Economy Minister Nadia Calviño said in an interview with SER.

Spain’s EU-harmonised 12-month inflation came in at 5.6%, up from 6.7% in November and below the 6.0% expectation of analysts polled by Reuters.

Free rail travel and discounts in local transport, rent caps and energy price relief for consumers seem to have had an impact on price developments.

Spain earlier this week passed the third major package of measures this year to ease the pain of inflation, including a reduction in VAT on staples like bread or milk and a €200 bonus for households with annual incomes below the €27,000 threshold.