Prices Fall in February but What Actually Costs Less Than Before?

According to the National Statistics Institute (INE) consumer prices dropped 0.8% last month when compared to prices of consumer items from February 2015. This has been a tendency for the last two months.

As for January as well, the main reason for the fall in the Consumer Price Index has been attributed to cheaper fuel and food prices.

And on a month-upon-month basis, prices also fell 0.4%, which is the largest reduction for this time of year since 1970.

Out of all the consumer goods, food and fuel are the two that weigh the heaviest on the expenses of a typical household in Spain. If you remove these two factors, instead of consumer prices falling 0.8% in February, they actually go up 1% compared to the same month last year.

So, what products have actually increased and decreased in price in the last year? With regards to food and non-alcoholic beverages, not all have followed the same trend. Those that are not manufactured, as in natural produce, have dropped the most in price in the last year.

For example, legumes and fresh fruit and vegetables are 9.8% cheaper than in February 2015. Pork meat costs 2.1% less, lamb is 1.9% cheaper, milk has dropped 3.7% in price and eggs have fallen 0.8%.

Nevertheless, not everything related to food is cheaper. The biggest increases in prices have been registered in olive oil: 20.7% more expensive; potatoes and potato products cost 14.8% more than before; and fresh fish has gone up 6.9% in the last year, although prices are dropping now, as February’s prices of fish are 6.1% less than those registered in January this year.

This point is also important as some products that are more expensive now than they were 12 months ago have actually fallen in price in the last month. This is the case for chicken, shellfish, coffee or cocoa products.

Leaving food products to one side, it is actually the cost of energy that most influences the rise and fall of the Consumer Price Index. For example, between February 2015 and February 2016, heating and water has lowered in price by 12.4%.

Filling up your car with petrol and running your personal transport has also gone down in cost by 4.2%. This is influenced by the fall in petrol prices. And public transport is also cheaper, by 1.4%.

Consumers will be pleased to read that energy products were 14.1% cheaper in February than they were a year ago, and this is compared to the 10.3% drop in price from January as well.

Electricity prices fell 14.2% last month (and 13% in January) when compared to costs 12 months previously, and fuel prices are also 14.2% cheaper.

With regards to the different autonomous regions in Spain, consumer prices did descend in all of them, albeit at a different rate. The smallest differences were registered in Cataluña and the Basque Country (-0.5%), followed by the Balearic Islands (-0.6%) and Navarra (-0.7%). On the other hand, annual prices dropped 1.4% in Castilla-La Mancha, which was the biggest decline in consumer prices in the last year.

Source: www.elpais.com