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Inflation up 2.6pc in 2003

15 January 2004

MADRID- Inflation rose by 2.6 percent last year, government officials said Thursday.

The figure represents a fall of 1.4 percent compared with the year before, when inflation stood at four percent.

The moderate rise in inflation, coming just under two months before the general election in March, is certain to be seen as an indicator of the health of the economy by the ruling centre-right Popular Party.

But unemployment in Spain still stands at 11 percent – higher than most other advanced economies in Europe.

The National Office of Statistics said consumer prices rose 0.2 percent last December.

Underlying or core inflation, which excludes volatile items such as fresh food and energy, moved up 0.1 percent in December for a yearly total of 2.5 percent.

During 2003, the sector that experienced the steepest price rises was education, up by 4.3 percent, followed by food and non-alcoholic drinks, which climbed 4.1 percent as did hotels, cafes and restaurants.

The cost of industrial goods rose by 0.9 percent and the services sector , excluding the price of the rental sector, saw rises of 3.6 percent.

There were rises in other sectors – alcoholic drinks (3.1 percent) tobacco and housing (2.8 percent) clothes and footwear (2.5 percent) medicines (2 percent) furnishings (1.7 percent) transport (1 percent) culture (0.1 percent).

But there were falls in prices in the communication sector (0.2 percent,) fuel and combustibles( 0.6 percent) and energy by 0.1 percent.

On a regional basis, the highest price rises in December were seen in the Canary Islands, Catalonia and Navarra (0.3 percent).

But in Madrid prices went up by slightly less – 0.2 percent. In Andalusia and Valencia the rise was 0.1 percent.

According to employment law, 2.5 million Spanish workers will be entitled to “compensation” from their employers as their wage rises did not meet the level of inflation.

One of the main unions, the CCOO, said these workers had signed agreements which only gave them salary rises of lower that 2.6 percent.

About ten million other workers had secured wages rises which were above inflation, according to the union.

[Copyright EFE with Expatica]

Subject: Spanish news