Inflation eases off but competitiveness still falling

14th March 2006, Comments 0 comments

14 March 2006, MADRID — Spanish inflation slowed down in February despite high energy prices.

14 March 2006

MADRID — Spanish inflation slowed down in February despite high energy prices.

The Spanish National Statistics Institute said consumer prices rose 4 percent year-on-year last month, compared with a 4.2 percent increase in January.

The fall in tobacco prices, partly as a response to rising tax imposed by the government and the new restrictions brought in by a law against smoking in many public places, was one of the main reasons for this effect, analysts said.

But inflation still stood at its highest point in February since 1995, when the level was 4.8 percent.

And it meant Spain's level of inflation – higher than many European neighbours – meant its competitiveness abroad was declining.

On a monthly basis, prices were unchanged, compared with the 0.4 percent monthly fall in January.

The main reason for the fall in January was the New Year sales.

On a European-wide adjusted basis, Spanish annual inflation was 4.1 percent in February.

[Copyright EFE with Expatica]

Subject: Spanish news

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