Flash August Spanish inflation to print at -0.2% yoy

Spanish HICP inflation remained flat (0.0% yoy) in July due to ongoing weakness in energy prices (energy component at -5.7% yoy), cutting 1bp alongside softer food prices at 1.4% yoy and cutting 9bp from the headline figure. This weakness was offset by gains in the core components. 

"The flash Spanish HICP inflation is expected to decline from 0.0% yoy in July to -0.2% yoy in August, led by a considerable amount of weakness in the energy prices. The core component  is expected to drop from 0.5% yoy to 0.3% yoy in August", says Societe Generale.

Services inflation added 8bp and non-energy industrial goods contributed 3bp to the headline figure. 

"Looking ahead, Spanish HICP inflation should remain in negative territory until the end of the summer, averaging -0.5% for 2015 and 0.9% in 2016. The core metric should be 0.2% in 2015 before rising to 0.9% in 2016", added Societe Generale.