CONSUMER PRICES - OCTOBER 2023

In October 2023, the national consumer price index for the whole nation (NIC), excluding tobacco, is estimated to have decreased by 0.2% month-on-month and increased by 1.7% year-on-year, from +5.3% in the previous month (the preliminary estimate was +1.8%).

The significant deceleration in the inflation rate is mainly due to the sharp slowdown on a year-on-year basis in the prices of energy, both non-regulated (from +7.6% to -17.7%) and regulated (from -27.9% to -31.7%) and, to a lesser extent, those of unprocessed food (from +7.7% to +4.9%) and processed food (from +8.9% to +7.3%). These effects were only partially offset by the acceleration of prices of services related to housing (from +3.7% to +4.0%) and services related to transport (from +3.8% to +4.0%).

Core inflation excluding energy and unprocessed food also slowed (from +4.6% to +4.2%), as did inflation excluding energy (from +4.8% in September to +4.2%).

The year-on-year growth of prices of goods stopped (the year-on-year change from +6.0%), while that of services remained stable (at +4.1%), bringing the inflationary differential between the services and goods sectors back to largely positive values (+4.1 percentage points, from -1.9 in September).

Prices of food, household and personal care products (from +8.1% to +6.1%) and those of high-frequency products (from +6.6% to +5.6%) slowed down further in trend terms.

The month-on-month decrease in the index was mainly due to prices of non-regulated energy (-1.9%), cultural, leisure and personal care services (-0.9%) and services related to transport (-0.6%); These effects were only partially offset by the increase in prices of regulated energy (+13.8%) and services related to housing (+0.4%).

Acquired inflation for 2023 is +5.7% for the general index and +5.1% for the core component.

The Harmonized Index of Consumer Prices (HICP) increased by 0.1% on monthly basis and by 1.8% on annual basis (a sharp deceleration from +5.6% in September); The preliminary estimate was +1.9%.

The national consumer price index for blue-collar and white-collar households (FOI), excluding tobacco, decreased by 0.1% month-on-month and increased by 1.7% year-on-year.

Commentary

In October, inflation fell sharply to +1.7%, the highest level since July 2021 (+1.9%). The drastic drop in the inflation rate is largely due to the trend in energy prices, which decelerated sharply due to the statistical effect of the comparison with October 2022, when there were sharp increases in prices in the sector.

A contribution to the reduction in inflation is also due to the dynamics of food prices, whose trend rate fell to +6.3%, acting as a brake on the year-on-year growth of "shopping basket" prices (+6.1%). Finally, the decline in core inflation was more contained, reaching +4.2% in October (from +4.6% in September).

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