August 29, 2014

According to preliminary data for August, consumer prices rose 0.2% over the previous month, which contrasted the 0.1% drop recorded in the month prior. The increase was driven by higher prices for transport and was partly offset by lower prices for energy. Consumer prices fell 0.1% over the same month last year, which contrasted the 0.1% increase observed in July. The figure marked the first annual drop on record.



Core consumer prices, which exclude more volatile categories such as unprocessed food and energy, rose 0.4% over the previous month in August, which was up from 0.1% increase tallied in July. Annual core inflation inched down from 0.6% in July to a record low of 0.5% in August. Finally, annual HICP inflation averaged 0.5% in August, which was slightly down from the 0.6% recorded in July and also marked a record low.

FocusEconomics Consensus Forecast panelists expect inflation to average 0.7% in 2014, which is down 0.1 percentage points from the previous month’s projection. For 2015, panelists expect inflation to average 1.1%.