The CPI rises in December to -0.5% and closes 2020 in negative for the first time since 2014

The Consumer Price Index (CPI) rose 0.2% in December in relation to the previous month and raised its interannual rate three tenths, to -0.5%, due to the rise in electricity and gasoline prices.

With the December data, the interannual CPI chains its ninth consecutive negative rate, according to the final data published this Friday by the National Institute of Statistics (INE), which coincide with those advanced at the end of last month.

The negative closing of the IPC in 2020 has allowed wages to gain more than two points of purchasing power. Specifically, the wage increase agreed upon in the agreement closed last year at 1.89%, almost 2.4 points above the year-on-year CPI for December.

The INE has attributed the rise in the interannual rate of the CPI for December to the increase in the prices of electricity, diesel fuel and fuels and lubricants.

The effects of the covid pandemic on tourism have also been reflected in the evolution of prices in 2020. The sector, heavily hit by restrictions, has seen all its numbers plummet since March: visiting tourists, tourist spending, overnight stays in hotels and non-hotel accommodation or operated flights, among others. It is not surprising, therefore, that the prices of hotels and hostels and international flights have crept into the list of products and services that fell the most in price in 2020.

Specifically, according to the final CPI data for December published this Friday by the National Institute of Statistics (INE), what became cheaper last year were liquid fuels, whose prices fell by 25.1%, followed by hotels and hostels (-18.3%); international flights (-17.3%); diesel (-12.4%), and natural gas (-11.8%).

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The ‘boom’ of teleworking has also been reflected in prices. Although what became more expensive last year was jewelry and bijouterie, with a rise of 13.7%, second place was occupied by computer accessories, which increased their cost by 10.3%.

They were followed by maritime passenger transport (+8.7%); other edible oils (+6.5%) and electricity (+5.9%), which is giving a lot of talk these days due to the price spikes registered in the middle of a cold wave.

The CPI closed 2020 at its first negative rate at the end of an exercise since 2014

Despite all this, the CPI closed 2020 at -0.5%, its first negative rate at the end of a year since 2014, which has allowed gains in purchasing power for both workers and pensioners, who at the beginning of 2020 saw their pensions rise, in general, by 0.9%.

In monthly rate (December over November), the CPI rose 0.2%. What increased the most in price in December in relation to the previous month were national tourist packages (+13.9%), while what fell the most were fresh fruits (-5.3%) and other clothing items, such as gloves, belts or umbrellas (-4.2%).

In the last month of last year, the Harmonized Consumer Price Index (IPCA) placed its interannual rate at -0.6%, two tenths above that of November.

Core inflation, which excludes unprocessed food and energy products, decreased one tenth in December, to 0.1%, which is six tenths above the general CPI rate.

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