The flash estimate of Spanish HICP inflation came in at -0.7% yoy, up from -1.2% yoy in February (2.0% mom). Markets were looking for a reading of -0.9% but some analysts see inflation sharply rebounding to -0.6%, on the back of higher fuel prices.
The statistical office (INE) confirmed in its press release that the bulk of the quickening effectively stemmed fromfuel prices.
Spanish HICP inflation should remain in negative territory until the end of the year, averaging -0.5% in 2015 and 1.2% in 2016. The core metric should remain at zero bound for 2015 and should only slightly pick up in 2016 to 0.2%, according to Societe Generale estimates.
