The CPI closes in December with the highest rate in almost 30 years

The National Statistics Institute (INE) has lowered the inflation figure by two tenths at the end of 2021 with respect to its advance of 15 days ago, until placing it at 6.5%, which even so becomes at the highest rate since May 1992. The average rate for the year, 3.1%, was the highest since 2011.

This follows from the Consumer Price Index (CPI) for December, released this Friday, and which reflects an increase of one point compared to the figure for November (5.5%) and which continues to reflect a large erosion of the purchasing power of wages, which increased by an average of 1.15% last year. The increase in the general level of prices also affects other variables ranging from savings to the rent paid by tenants.

The rise in prices compared to the last month of 2020 is again marked by the sharp increase in electricity prices, as has happened in recent months, to which other components have been added such as food and the segment of hotels, cafes and restaurants. Compared to November, the increase in the CPI was finally 1.2% instead of the 1.3% initially estimated.

In addition, accommodation services became more expensive in December compared to the same month of 2020 and the restoration raised prices above what it did a year earlier.


By contrast, the prices of fuels and lubricants for personal vehicles fell in December this year, in contrast to the rise they experienced in 2020.

Core inflation (without unprocessed food or energy products, which are the most volatile elements) increased four tenths in December, to 2.1%, which is almost 4.5 points below the general CPI rate . Is the highest underlying rate since March 2013 and reveals that the rise in prices is spreading to the economy as a whole.

Fifth consecutive rally

In monthly rate, the IPC chained its fifth consecutive rebound rising 1.2% in December, almost one point above the rise registered in the month of November.

In the last month of 2021, the Harmonized Consumer Price Index (IPCA) placed its interannual rate at 6.6%, more than one point above the previous month. For its part, the advance indicator of the IPCA rose by 1.1% in monthly rate.

One of the variables that has most influenced this evolution of the general level of prices has been the light, which has become 72% more expensive in the last year, including the tax reductions applied to the electricity bill. Discounting these tax cuts, the year-on-year rise in the price of electricity would be 96.8%.

If the reduction of the special tax on electricity and the variations on other taxes are excluded, the interannual CPI reached 7.3% in December, eight tenths more than the general rate of 6.5%. This is reflected in the CPI at constant taxes that the INE also publishes within the framework of this statistic.

Next to the electricity, the food group also pushed up the year-on-year rate of inflation, especially due to the rise in the prices of legumes and vegetables, bread and cereals and meat. In addition, the Accommodation Services became more expensive in December compared to the same month of 2020 and the restoration raised prices above what it did a year earlier.

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The housing group raised its year-on-year rate by more than 6.5 points in December, to 23.3%, due to the rise in the price of electricity, while the food group increased its rate by almost two points, to 5%, due to the higher cost of most of its components, and that of hotels, cafés and restaurants registered an interannual rate six tenths higher than that of November, reaching 3.1%.

In contrast, the transport group cut its interannual rate by more than 2.5 points, to 10.9%, due to the lower cost of gasoline for personal transport.

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