10 January 2001, 17:04 OUTLOOK: Spain Dec CPI up 0.3-0.4 pct mth-on-mth; up 3.9-4.0 pct yr-on-yr (corr)
MADRID (AFX) - Consumer prices data for December to be released
Thursday are expected to show a 0.3-0.4 pct increase from November and
to be 3.9-4.0 pct higher than a year earlier, according to economists'
forecasts.
In November, consumer prices climbed 0.2 pct from October and were
up 4.1 pct from a year earlier, at the top end of analysts'
expectations.
Both Beta Capital and BSCH Bolsa are looking for a 0.3 pct
month-on-month rise in December inflation, leaving the year-on-year
increase at 3.9 pct.
MMS Standard&Poor's is forecasting a 0.4 pct rise in December from
November and a 4.0 pct increase from a year earlier.
Beta Capital head economist Felix Gonzalez attributes the more
moderate trend registered in the December year-on-year headline
inflation to the sharp decline in oil prices over the month.
He is forecasting a 1.2 pct fall in energy product prices in
December, compared with the 1.4 pct increase registered in November.
MMS Standard & Poor's analyst Stine Madsen agreed that lower oil
prices will have a positive impact on last month's headline inflation
rate.
"Prices fell substantially at the beginning of December, although
the trend since then has been rather more stable," she noted.
With regard to other key CPI components, Gonzalez said he is
looking for a slight uptick in processed food prices in December, while
fresh food prices are expected to be softer than in the previous month.
Analysts noted, however, that it is still difficult to judge the
potential negative impact on fresh food prices from the recent outbreak
of BSE in Spain.
On the outlook for the coming months, Gonzalez said that based on
an average crude price of 25 usd per barrel "we are forecasting a sharp
downturn in the CPI rate during the course of 2001...The average
inflation rate for the year should come in around 2.7 pct, compared
with our estimate of 3.4 pct for 2000."
Apart from oil prices, he said the other key factor affecting the
trend in inflation this year will be salary negotiations.
"Workers lost a lot of purchasing power last year, so I think we'll
see annual wage increase demands of 3.0-3.5 pct this year...The
government will have to push forward with structural reforms to create
the right climate to be able to temper such demands," Gonzalez noted.
© 1999-2024 Forex EuroClub
All rights reserved