Prices have been falling for four consecutive months since they touched 11% in July. With the 6.8% in November known today, it is confirmed that inflation has entered a moderation phase, although this percentage is certainly still very high, and it will take time to return to levels considered normal. This represents a reduction of half a point compared to the interannual rate of the previous month, when it stood at 7.3%.
It is the prices of electricity and fuel that have pushed the CPI down this month.
Looking at the evolution of the last few months, it can be seen that it has gone from 10.8% in summer to 6.8%. November, according to the data provided by the INE this morning. This represents the lowest annual inflation since January of this year. “The trend towards moderation that began this summer continues,” they say from the Ministry of Economy.
On the other hand, core inflation, which does not take into account energy or fresh food, has risen slightly, one tenth, standing at 6.3%. This inflation, considered less volatile than the general CPI, has been above 6% since July, and just as it took longer to increase than the general index – in January it was at 2.4% – now, it will also take longer in descend. Its high levels show the full transfer of high energy prices to other products.
If the definitive inflation data confirms the figure advanced today, it will mean that pensions will increase by 8.46% next year. The current legislation, already applied last year, provides for increasing pensions according to average inflation from December of last year to November of this year. In this way, pensioners ensure that they maintain their purchasing power, even if it is at the cost of a sharp increase in public spending.
Pensions will increase by 8.46% next year
Looking back at 2022, it can be seen how it started with already high inflation, 6.1% in January, to later pay dearly for the start of the war in Ukraine, which triggered prices that touched 10% in March and already in July they reached to its maximum in July. Since then, the CPI has moderated, but it is and will continue to be a gradual process.
That is why the Bank of Spain places average inflation for 2023 at 5.6%. In any case, it is becoming noticeable that the reduction in the price of raw materials and the better functioning of the supply chains make it possible to ensure the moderation of prices.