Inflation falls but energy prices player bigger role

14 July 2006

MADRID — Inflation fell by one point to 3.9 percent year-on-year in June, according to the latest figures published on Friday.

The National Institute of Statistics said that although the annual inflation fell in June, the monthly rate went up by 0.2 percent to 2.3 percent.

However, experts said the underlying rate of inflation remained at 3 percent.

The figures did not include fluctuations in the prices of energy and fresh foods.

In June, the year-on-year price of houses, which is always a key indicator of the cost of living, rose by 7.3 percent.

This came despite the fall in gas prices for heating homes.

The annual price of transport rose by 6.7 percent, one point less than in May.

This was mainly due to the fall in the price of lubricants and petrol.

Other notable price rises came in the cost of hotels, coffee and restaurants (4.5 percent) and food and non-alcoholic drinks (4.1 percent) – five points more than in May.

Analysts from the Treasury said energy price rises were the main reason for all these rises.

This year they are playing an even greater role in the rise in inflation than in the year before.

[Copyright EFE with Expatica]

Subject: Spanish news