Higher fuel prices push inflation up to 3.7pc
30 September 2005, MADRID — Higher fuel prices have raised inflation up to 3.7pc in September, damaging Spain's competitiveness abroad.
30 September 2005
MADRID — Higher fuel prices have raised inflation up to 3.7pc in September, damaging Spain's competitiveness abroad.
Inflation rose by three points from 3.4pc in August.
The September rate of inflation is the highest for two-and-a-half years.
Spain's National Institute of Statistics (INE) issued fresh data about the nation's economic health, though did not issue a detailed breakdown.
Economics minister Pedro Solbes described the figure as being "without doubt bad news".
He said the rise was due to the increase in the cost of petrol and higher fresh food prices.
The inflation differential between Spain and the rest of the eurozone stood at one percentage over in August.
Spanish exporters are already hampered by the rise in the euro against the dollar, which makes their products relatively more expensive.
The country's main export markets are in the euro zone.
Gross domestic product was up 3.4pc annually for the second quarter – more than double the euro zone average.
But that was due to domestic demand.
In contrast, the foreign sector cut 2.6 pc off overall growth.
The country's current account deficit rose to 7.5pc of GDP in the first half of this year.
Spain has slipped in the World Economic Forum's Growth Competitiveness Index from 23rd to 29th this year, behind Portugal and Estonia.
But Spain is a member of the European Monetary Union, so its polices are dictated by the European Central Bank.
This means it cannot push interest rates up to cut inflation nor devalue to makes its exports cheaper.
[Copyright EFE with Expatica]
Subject: Spanish news