13 August 2015

2015- n° 193

Consumer prices diminished by 0.4% in July 2015; they rose by 0.2% year-on-year Consumer price index - final results - July 2015

The Consumer Price Index (CPI) decreased by 0.4% in July 2015 after –0.1% in June. Seasonally adjusted, it remained stable compared with the previous month and continued to rise slightly year-on-year (+0.2% after +0.3% in June).

The decline in the CPI in july 2015 was due mainly to seasonal falls in manufactured goods prices linked to summer sales, seasonal decreases in fresh foodstuff prices plus a further price reduction in energy. These decreases were partly offset by a rise in prices of some services during the summer holidays.

Due to summer sales, prices of manufactured products decreased broadly by 3.1% in july 2015 (–2.9% in July 2014 and –0.9% year-on-year). As every year, prices of clothing and footwear dropped significantly (–14.4%; –1.6% year-on-year), with average discount rates higher this year than last year. Summer sales contributed also to the decrease in prices of other products, but in a lesser extent. This was the case for travel goods and other carriers of personal effects (–4.7%; +1.7% year-on-year), household textiles (–4.0%; –0.5% year-on-year), furniture and furnishings (–3.9%; –0.1% year-on-year), audio-visual, photographic and information processing equipments (–0.7%; –3.4% year-on-year) and domestic appliances (–1.7%; –1.1% year-on-year). Furthermore, the downward trend in prices of medical products continued (–0.4%; –3.6% year-on-year).

Energy prices decreased again in July 2015 (–1.2% after -0.5% in June; –4.0% year-on-year), mainly due to the pursuit of the decline in petroleum product prices (–1.8% after –0.8% in June; –9.2% year-on-year). Prices of motor fuels decreased by 1.5% (–8.0% year-on-year) and those of heating fuels by 4.0% (–16.2% year-on-

year). Town gas prices were also down in July (–1.6%; –2.1% year-on-year) while electricity fares stayed steady (+4.3% year-on-year).

In July 2015, food prices were down 0.5% compared with the previous month (as in July 2014; +0.4% year-on-year) due to the seasonal decrease in prices of fresh foodstuffs (–4.1%; +4.6% year-on-year), in particular those of fresh fruits (–4.4%; +6.1% year-on-year) and fresh vegetables (–5.3%; +3.9% year-on-year). Excluding unprocessed products, food prices remained stable for the fourth month in a row and declined by 0.2% year-on-year (after –0.3% in June). Prices of milk, cheese and eggs (–2.1%) as well as children foods and dietetic products remained sharply down year-on-year (–7.2%); meat prices were up slightly (+0.5% year-on-year in July after +0.3% in June).

As every year, service prices grew significantly in July (+1.2% compared with the previous month; +1.4% year-on-year). The main contributors to this seasonal increase were prices of restaurants, cafes and hotels (+2.2%; +1.4% year-on-year), airfares (+19.8%; +3.1% year-on-year), package holidays (+21.4%; +3.4% year-on-year) and holiday rentals (+24.9%; +0.4% year-on-year). Moreover, fares of insurance connected the dwelling were up (+2.1%; +2.9% year-on-year) after the end of dicounts. Finally, telecommunicaton prices declined slightly in July 2015 (–0.2%; +2.0% year-on-year).

The core inflation indicator (ISJ) rose by 0.1% in July 2015 after it remained unchanged in June. Year-on-year, it grew by 0.7% (after +0.6% in May and June). The Harmonized Index of Consumer Prices (HICP) decreased by 0.5% compared with June 2015; it increased by 0.2% year-on-year (down from +0.3% in June 2015).