The INE confirms headline inflation ended at 5.9% and core inflation continues to rise at 7.5%
Inflation has been the biggest headache for families since Ukraine’s war crisis began nearly a year ago. The main problem started with energy, but now the main concern is the shopping basket, the prices of which have risen so much that the government has had to act and reduce or abolish VAT on basic foods. Despite this measure, food was up 15.4% in January from a year ago, according to data confirmed by the INE this Wednesday. In fact, even on a monthly basis (January compared to December), the price of food increased by four-tenths.
The Ministry of Economic Affairs shows that if only food prices with reduced or abolished VAT are taken into account, a decrease of 1.6% can be seen compared to December. These data in monthly figures (January over December) reflect that bread fell by 0.2%, milk by 1.5% or eggs by 1.5%. But it’s not the only non-VAT foods that became cheaper in the first month of the year according to INE indicators: fresh fruit (-4.2%), legumes (-1.1%), potatoes (-1%), flour (-2.3%) and cheese (-0.7%). In addition, the VAT reduction from 10% to 5% resulted in a price reduction of 1.2% for olive oil and 3.5% for pasta.
These data in monthly figures (January over December) reflect that bread fell by 0.2%, milk by 1.5% or eggs by 1.5%. But it’s not the only non-VAT foods that became cheaper in the first month of the year according to INE indicators: fresh fruit (-4.2%), legumes (-1.1%), potatoes (-1%), flour (-2.3%) and cheese (-0.7%). In addition, the VAT reduction from 10% to 5% resulted in a price reduction of 1.2% for olive oil and 3.5% for pasta.
Overall CPI fell by two-tenths of the annual rate in January to 5.9%, one-tenth more than expected in the INE forecast, due to fuels rising in price with the end of the 20c-per-litre bonus on December 31 . Telephone services and clothing have also increased inflation, according to data published by the INE.
But the underlying rate continues to skyrocket. In January it reached 7.5%, half a point more than the previous month and the highest since 1986. It exceeds the general index by more than one and a half points. The ministry led by Nadia Calviño indicates that this underlying rate “will reflect the fall in general inflation and energy costs in the coming months”. It is also striking that, despite the increase in fuel due to the end of the surcharge, the general rate has only increased by two tenths.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
