Spain’s year-on-year inflation slows down again in December, to 5.8%

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Consumer prices in Spain rose 5.8 percent in December, the slowest annual pace this year, thanks to lower electricity prices compared with a year ago, advanced data from the National Statistics Institute (INE) showed on Friday.

All in all, core inflation, which excludes volatile fresh food and energy prices, stood at 6.9% year-on-year, above the 6.3% recorded a month ago, according to INE data.

In November, Spain had the lowest inflation of the 27 members of the European Union, with a rate of 6.7%, after peaking in July at around 11%.

“The reading has to be very positive, because they have dropped five points in five months. (…) It is logical that core inflation (…) is taking longer (to fall), because it took longer to rise,” Economy Minister Nadia Calviño said in an interview with Cadena SER.

Spanish twelve-month inflation harmonized with the European Union was 5.6%, down from 6.7% in November and the 6.0% expected by analysts surveyed by Reuters.

Free local train tickets and discounts on urban transport, limits on rising rents and measures to alleviate the energy bill for consumers seem to have influenced price growth.

Earlier this week, Spain passed this year’s third major package of measures to ease the pain of inflation, which includes value-added tax (VAT) reductions on staples such as bread or milk and a €200 bonus for households with annual incomes below the €27,000 threshold.

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