Alejandra Olcese

Updated Tuesday, January 30, 2024-09:00

  • Prices Inflation will rise again in January: "It is too early to know if food will change its trend"

Inflation

accelerated in January to reach

3.4% year-on-year, three tenths more than in December, in

a

context of withdrawal of some of the anti-inflationary measures by the Government - such as the reduction in taxes on electricity and gas , which have already begun to rise gradually - and in the face of the crisis in the Red Sea, which could have already influenced inflation expectations in the short and medium term.

The price readjustment

that many companies apply starting in January and which, according to experts, has been much stronger than usual in recent years due to uncertainty and fear of generating more inflation, may

also have affected the increase.

; and, as the INE has explained, it has also had to do with the fact that

electricity

this year has risen compared to the drop it registered in January of last year.

Gasoline

, however, cushioned this effect, because it fell in price while in January 2023 it had become more expensive

.

For all these reasons, according to data released this Tuesday by the National Institute of Statistics, the CPI rose to 3.4% this month,

exceeding what was expected

by the main analysis houses. Funcas had predicted that the indicator would reach 3.3%; the Complutense Institute of Economic Analysis had placed it at 3.1%; and Oxford Economics predicted that it would remain below 3%.

More positive is the evolution of

underlying inflation

, which measures the price of all consumer goods and services except for the most volatile ones (fresh food and energy products) and which is considered an indicator of the trend inflation of the economy, that underlies and will be maintained over time. This

has moderated from 3.8% to 3.6% in January.

The Minister of Economy,

Carlos Body,

has celebrated that "inflation remains

contained

at around 3% and that underlying inflation continues to moderate to its minimum level in the last two years." Furthermore, he has indicated that the reduction path is compatible with maintaining aid for the most vulnerable households, in relation to those that have remained active, such as the reduction in VAT on food products.

If these had been withdrawn, inflation in January would have surprised more on the rise. For the year as a whole, it is expected that the CPI will rise around 3% every month and that, on

average

for the year,

inflation will rise by 3.2%

, compared to 3.5% the previous year.