The IPC chains three consecutive months of slowdown from the 10.8% high recorded in July
Inflation declined sharply for the second month in a row in October, though it has now slowed for three months in a row. The flash CPI fell to 7.3% year-over-year, down 1.6 percentage points from 8.9% recorded the previous month, when it also fell 1.6 points. In other words, according to data released Friday by the National Institute of Statistics (INE), the consumer price index has fallen by more than three percentage points in two months.
This evolution in October is mainly due to the decline in electricity prices, which rose in October 2021. Also an influence, albeit to a lesser extent, is the decrease in gas compared to the increase of the previous year, and the increase in prices before the start of the new clothing and footwear season, more moderate than in 2021, may have influenced due to the high temperatures recorded and which have slowed down winter purchases. In October, the monthly CPI price rose 0.4% compared to September.
These preliminary data, to be confirmed by the statistic by mid-next month, reflect strong containment of the price increases that the index had reflected until the summer. However, the inflation problems remain as the estimated annual variation rate of core inflation (general index excluding unprocessed foods and energy products) remains at 6.2%.
Sources from the Ministry of Economy point out that the drop of more than one and a half points in inflation in October is “one of the biggest monthly declines in the historic series since joining the euro, in 2002” and they assure that from the Inflation peak recorded in July (10.8%), the government’s measures “have made it possible to reduce inflation by 32%”. Among the measures approved by the executive are the Iberian mechanism (ceiling on the price of gas for electricity production applied since mid-June), the reduction of VAT to 5% on the price of electricity and gas , the ceiling on 2% increase in housing rent or reduction in transport prices.
The estimated annual percentage variation of the Harmonized Index of Consumer Prices (IPCA) was 7.3% in October, more than one and a half points lower than the previous month. For its part, the estimated monthly variation of the IPCA is 0.1%.
Source: La Verdad
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