Inflation Trends: December Shows Slight Increase in Consumer Price Index
In December, the Consumer Price Index (CPI) rose by 0.5%, marking an increase in the year-on-year rate by four-tenths to 2.8%, according to final data published this Wednesday by the National Statistics Institute (INE). This year-end figure of 2.8% aligns with the estimate released at the end of last month, but the monthly rise of 0.5% is a slight revision from the initial estimate of 0.4%.
Core inflation, which excludes unprocessed food and energy products, experienced a two-tenths increase in December, reaching 2.6%. This figure is two-tenths lower than the general index, confirming trends observed throughout the year.
The INE attributed the annual rise in the CPI to increased fuel prices, along with a notable uptick in leisure and cultural expenses during December compared to the previous year. Specifically, the transport group's year-on-year rate jumped by 1.6 points to 0.6% in December, prompted by rising prices for fuel and lubricants for personal vehicles, contrasting with the decrease observed in December of the previous year. The leisure and culture category rose by 1.2 points to 3.2%, reflecting the heightened costs associated with tourist packages.
As a result of the December data, inflation has recorded three consecutive months of increases, reaching its highest value since July, which also stood at 2.8%.
The Ministry of Economy, Trade, and Business has attributed the upward trajectory of the year-on-year CPI mainly to the base effect resulting from fuel price fluctuations. Despite the increase, the Department emphasized that the CPI closed 2024 at 8.0% lower than the average of 2023, which was 3.6%. Notably, food inflation remained contained, finishing 2024 at 1.8%, one percentage point below the general inflation rate.
Food inflation has shown a marked slowdown over the year, ending 55 points lower than the figures recorded in December 2023. A significant factor in this moderation is the notable drop in olive oil prices, which decreased by 12.3% over the last year.
The economy has also indicated that the reduction in CPI throughout the previous year reflects the success of economic policy measures implemented, fostering greater growth among leading economies in the euro area and aiding in continued inflation reduction.
On a monthly scale, the CPI rose by 0.5% in December 2024 when compared to November of the same year, which is three-tenths higher than the increase registered in November. The December rebound in inflation can be linked to various factors, including a 3.5% increase in the leisure and culture sector due to rising tourist package prices, a 0.6% increase in housing-related expenses attributed to electricity costs, and a 0.4% rise in transport costs linked to gasoline price hikes. Meanwhile, the harmonized CPI (HICP) rose by four-tenths in December to 2.8%, marking a 0.4% increase in monthly values.
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