Madrid, Jan 29 (EFE) .- The consumer price index (CPI (Frankfurt: IPEN.F – news)) has begun 2016 in negative territory with an annual fall of 0.3% in January, mainly due to lower prices of electricity, according to the advance today by the National Statistics Institute (INE) indicator.
If the INE confirmed this information on 12 February, consumer prices return to negative rates after they finished 2015 to zero in a year in which the index only rose in June and July to positive territory and was placed at 0.1% in both months.
The Deputy Prime Minister Soraya Saenz de Santamaria stressed that the decline in the CPI “will have a clear impact on the pension and in the purchasing power of wages “and that Spain maintains an inflation differential of 1 point compared to one of the leading economies in the euro zone, such as Germany.
The analyst at the Foundation of Savings Banks (Func) Maria Jesus Fernandez, has admitted that the fall in the CPI of 0.3% was lower than expected, as expected a decline of 0.1%, while it has said that unless oil prices rise so significantly, the overall rate will be negative in 2016.
However, Fernandez sees positive the fact that the index remains in negative rates, since a wage growth of around 1 expected %, so that “we will win purchasing power for the second consecutive year.”
“By reducing the price of the basket, the average wage gains purchasing power and this is beneficial for the economy Spanish, “he said.
For the coordinator of the Research Institute for Economic Studies (IEE), Almudena Semur, what matters is the underlying rate (excluding energy and fresh food) remained rates “very contained” by recording an average of 0.6% in 2015 and an upward trend.
Also, Semur has stressed that domestic demand “is throwing a lot” of inflation, so “we do not have to worry about”, after noting that it is anticipated that the overall index finished the year “shyly” but positive rates, with 0.9% annual average in 2016.
Online with Semur, the expert of International Financial Analyst (AFI) Victor Echevarria says that the key to the fall in consumer prices is a consequence of the lowering of energy products, so there is no risk of deflation since inflation underlying remains stable and even picking a few months.
In his opinion, if the oil price stabilizes at current levels, the CPI will remain at very low levels, around zero during the first half of 2016, while in the second half of the year could start to pick up.
The professor of economics at the Esade business school, Josep Comajuncosa notes that the fall in prices was initially produced by ” brutal fall in aggregate in developed countries in 2009 demand “while” deflation “now is a result of falling energy prices,” something that is not bad, since it reduces the cost of production companies “.
Therefore believes that deflation is not a concern since it involves the reflection of a situation of economic weakness.
Meanwhile, BBVA Research has emphasized that energy continues to put downward pressure on prices, while core inflation remains stable.
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