The estimated annual inflation of the CPI in August 2021 is 3.3%, according to the leading indicator prepared by the INE. It is the highest level since October 2012. If confirmed, it would mean an increase of four tenths in its annual rate, since in July this variation was 2.9% .
With the August data, the year-on-year CPI chains its eighth consecutive positive rate and continues at its highest levels since October 2012.
According to Statistics, in the interannual behavior of the CPI, the rise in electricity prices stands out, higher this month than in August of last year. Throughout the month of August, it has set several historical highs in the wholesale market and has made the electricity bill more expensive .
Until next September 14, the INE will not publish the evolution of all the components. But, in addition to light, other energy products are also driving up costs for the consumer. The price of natural gas is five times its price compared to last year. And fuels have also seen a sharp rise from last year’s levels. The rise in prices is also being generalized in foreign trade .
The rise in the standard of living is mainly motivated by the rise in raw materials due to the economic reopening after the impact of the pandemic and is spreading to all kinds of products and services. The evolution is exceeding the forecasts for the global economy and for the Spanish one. The Bank of Spain and the European Commission expected a CPI for 2021 of around 2%. Institutions, starting with the ECB, expect upward price pressure to be temporary and limited by 2021 .
In monthly terms, the CPI returns to positive rates, rising 0.4% in August, after falling 0.8% in July after adding four consecutive months of increases.
The INE incorporates in the advance of CPI data an estimate of core inflation (excluding non-processed food or energy products), which increased by one tenth to 0.7% in August, reaching more than two and a half points below that of the general CPI. This sub-index is often very followed by economists because it tends to mark the long-term trend in prices as it is not subject to so much volatility. The underlying index is also taking off and is already at 2020 highs.
In the eighth month of 2021, the Harmonized Consumer Price Index (HICP) placed its interannual rate at 3.3%, four tenths more than that registered the previous month. For its part, the leading indicator of the IPCA rose 0.4% in monthly rate.