The moderation in the prices of food, fuel and electricity explains the reduction of nine tenths of a percentage point in inflation in May, reaching 3.2%. It is the lowest rate since July 2021 and confirms the trend towards a moderation in inflation that began in March and which, despite the rebound in April, is now reaffirming itself. In this way, the data advanced by the National Institute of Statistics (INE) on May 30 has been confirmed.
With regard to food, it has slowed down almost one point since the previous month, remaining at 12%, thanks to the moderation in the prices of basic products, such as milk, cheese, eggs and fish. The prices of fish and shellfish also decreased, and in this case their effect was accentuated because they increased in May of last year. For its part, the price of bread and cereals also slows down inflation because they grew last year.
It is the third consecutive month that food inflation has moderated, which is a noteworthy fact because food is having a forceful impact on the pockets of citizens with the spectacular rise that it registered in recent months, which peaked in February with 16.7% and that is slowing down. In May up to 12%. The process is particularly slow because the energy reduction is transmitted with a delay through the entire production chain of the food industry.
On the other hand, core inflation, which does not include energy or fresh food, has also moderated. In this case, nine tenths below that registered in April, which stands at 6.1%. A value that is still very high, although it is true that it has been chaining three consecutive months, moderating from the maximum point of 7.6% that it reached in February. It is a sample of how the skyrocketing increase in the price of energy, which was the trigger for the current inflationary situation, has been transferred to all products.
It is known that the underlying takes longer to rise, but also that it is very difficult for it to moderate, and now it is on this path, but it will be slow. (The forecast of the economists is that the average of the underlying inflation this year will be around 6%.)
These inflation data will be one of the determining elements that the Government will take into account to decide in the coming days whether to maintain the measures in force against inflation or, as Brussels is already reminding it, begin to eliminate them to cut the deficit and the public debt, objectives set aside in recent years to prioritize economic recovery, but now it is time to face them. For example, you will have to decide whether to maintain the VAT reduction on basic foods, which has been applied since January of this year and which, in principle, ends on June 30.
