Spain’s 12-month inflation dips to 3.1% in December as fuel prices drop

Dec 29 (Reuters) – Spain’s 12-month inflation rate inched down to 3.1% in December as fuel prices decreased and food prices stabilised, from 3.2% in the period through November, preliminary data from the National Statistics Institute (INE) showed on Friday.

The 12-month inflation was below the 3.2% expected by analysts polled by Reuters and down from 5.7% in 2022 and 6.5% in 2021. Consumer prices were unchanged in December.

Core inflation, which strips out volatile fresh food and energy prices, was 3.8% year-on-year, the lowest level since March 2022, the INE data showed.

The average inflation for 2023 fell to 3.6% from 8.4% in 2022, said the INE, which will confirm the final reading in two weeks.

“Headline and core inflation continue their downward trend, allowing wages to continue gaining purchasing power and Spanish companies to become more competitive, even in the difficult international context,” Economy Ministry said in a statement.

Spain’s European Union-harmonised 12-month inflation unchanged from November at 3.3%, though below the 3.4% expected by analysts polled by Reuters.

Spain’s inflation was one of the lowest in the euro zone, although still exceeding the European Central Bank’s 2% target.

Bank of Spain expects prices to rise 4.3% in 2024.