Inflation Update: November CPI Rises Again to 2.4%
The Consumer Price Index (CPI) climbed by 0.2% in November compared to the previous month, leading to a year-on-year increase of six-tenths to 2.4%, as reported by the National Statistics Institute (INE) this Friday. This final data aligns with forecasts from the end of last month. The surge in the CPI to 2.4% is primarily attributed to rising fuel prices and increased electricity costs, contrasting with price declines observed in November 2023.
Specifically, the housing group's year-on-year rate soared by 3.2 points to 7.4% due to elevated electricity costs, while transportation's annual rate rose by 2 points to 1%. This increase is linked to higher prices for fuels and lubricants for personal vehicles, following a decrease seen in November of the previous year.
This uptick in the CPI marks two consecutive months of inflation increases, reaching its highest point since July, when it stood at 2.8%. The Ministry of Economy, Trade, and Business attributes this annual CPI increase to a base effect related to electricity and fuel prices. In a statement led by Carlos Cuerpo, the department noted that food prices held steady at a year-on-year rate of 1.7% in November, thanks to favorable prices in certain products such as oil, which saw a year-on-year price drop of 3%.
Furthermore, it was highlighted that the average inflation over the past 12 months has been 2.8%, maintaining a downward trend compared to the peak of last year. This reduction of one point compared to last year's average signifies a vital achievement, nearly three times lower than the rates observed in 2022. The Ministry asserts that this decline exemplifies the effectiveness of economic policy measures that have been implemented, facilitating enhanced growth in the primary economies of the eurozone while progressively reducing inflation.
In terms of core inflation, which excludes unprocessed food and energy products, there was a slight decrease of one-tenth in November to match the general index at 2.4%. The monthly CPI increase of 0.2% in November is 0.4% lower than the increase recorded in October. Key drivers for this monthly rise included significant price increases in the clothing and footwear sector, which saw a 4.2% increase due to winter season demands, alongside a 1.6% rise in housing prices due to escalating electricity costs.
In contrast, prices for leisure and culture fell by 1.5% in November, attributed to decreased costs in tourist packages. Meanwhile, the harmonized Consumer Price Index (HICP) also reflected a sixth-tenths rise in November to 2.4%, remaining stable in month-to-month comparisons. This evolving economic landscape signals critical shifts in consumer prices and offers insights into emerging inflation trends as the year draws to a close.
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