Even though inflation reached its highest rate in 38 years in July, the detailed analysis of the INE data shows that prices hit the brakes slightly. However, this statement is not true for food, which is becoming more and more expensive. Inflation is expanding in the shopping cart, led in July by flour and other cereals, whose amounts grew by 7.5% compared to what was paid in June. But also fish, rice or coffee are accelerating. The phenomenon is also observed in services related to tourism, while some energy products seem to be starting to slow down.
Of the 200 subclasses of products whose price level is detailed by the INE, 55 are part of the group of food and non-alcoholic beverages. Only four of them (olive oil, other edible oils, fresh vegetables, and other cereal-based products) were more affordable in July than in June. The rest saw their amounts rise with the exception of nuts, which remained the same. Food prices, therefore, are clearly rising, something that was already seen in June because then there were eight subclasses that became cheaper.
In addition, the rise is gaining strength. If you look at the difference between how much each subcategory became more expensive in July and how much it did a month earlier, 25 of them show an acceleration as a result. In June, compared to May, there were only 20 that showed this behavior. For Josep Maria Català Saintanes, collaborating professor at the UOC, it is undoubtedly bad news for households because they are products that are difficult to replace: “You cannot do without buying certain vegetables or meats,” he sums up.
Among the 10 food subcategories that rose the most in price, flour takes the cake; but some dairy and bakery products, pasta, butter, mineral water, cheese, jams and poultry and lamb also enter. The vast majority of them, in addition to becoming more expensive, are accelerating the inflationary process because in July they grew more than in June. But not all of them: butter, for example, is one of the most expensive products, but its progression has slowed down, so it can be considered that it is slowing down the rise.
On the contrary, other products such as fresh fish, cocoa powder or coffee do not appear on the list of those that rose the most, but they do show a clearly upward trend. And in the lower part of the table, fruits gave a positive surprise because they fell 6.6% monthly, although that does not mean that they are cheap compared to a year ago, because from May to June they had risen 11%. “Food needs transport or cold storage and in the end the costs grow,” explains Català. The expert believes that “energy always appears behind each rise, which has repercussions on any business or sector”.
From the point of view of monthly variations, energy in July left news for all tastes. Drivers can see the glass half full, because both gasoline and diesel became cheaper compared to June. However, the rest of the subcategories, more linked to domestic consumption, rose. The ones that most, natural gas (7%) and electricity (6.4%). To further complicate the conclusions, these last two show opposite trends: natural gas accelerated compared to the previous month, while electricity slowed down a bit (in June it rose by more than 9%).
In general terms, 122 of the 200 subcategories increased in amount in July, compared to 138 in June. From the point of view of how many products became inflation accelerators (progressing more than in the previous month), 62 cases appear, compared to 67 in June. In other words, in general terms, the seventh month seems to have contained the contagion of inflation. The UOC professor believes that it is a reaction to monetary policy. “In the end, the European Central Bank and the Federal Reserve got down to business a little late and interest rates have risen: that slows down consumption”, he points out. To this is added that “the price of oil falls because it is anticipating a recession” in which the US has technically already entered.
However, tourism is out of the general rule, in the middle of summer. This activity concentrated the largest monthly increases (although, curiously, the hotels became a little cheaper). And those who did not travel did not escape the famine either because there are no traces of improvement, at the moment, in the shopping cart.
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