Global| Jan 13 2006CPI Inflation Slows Further in France for December, Still Restrained in Spain, Finland and Slovakia
Summary
Inflation was modest across four European countries as 2005 ended, according to CPI data reported today. In France, the total index rose 0.2% in December from November and 1.5% from December 2004. This was even slower than the 2.1% in [...]
Inflation was modest across four European countries as 2005 ended, according to CPI data reported today. In France, the total index rose 0.2% in December from November and 1.5% from December 2004. This was even slower than the 2.1% in 2004. France's CPI excluding energy slowed for the year by a similar amount, to 1.1% from 1.5% across 2004. The slowing is concentrated in manufactured products, for which prices fell more than in 2004, and even in services, which rose 2.8% across 2005, less than the 3.3% in 2004.
Consumer prices also moderated in Slovakia, although it has a much more inflation-prone economy. The index was up 0.6% in December, putting the year at 3.7%, markedly less than the 6.0% in 2004. The slowing was widespread, but variable. Housing and related expenses, for instance, were up 10.8%, but this was not as much as 13.8% in 2004. Price categories that firmed did so by decreasing less than they had in 2004, including such basic items as clothing and furniture. Even transportation costs rose more slowly, 3.3% versus 5.7%.
2005 inflation picked up in two other countries, however, Spain and Finland. In Spain, the total CPI rose 0.3% in the month of December and 3.8% across 2005; the yearly rate was 0.6 percentage point more than in 2004. Higher energy costs were surely an ingredient, but core inflation also rose, from 2.7% in 2004 to 3.1% last year. Finland, characterized by low CPI inflation generally, nonetheless saw its pace more than double last year to 1.0% from 0.4% in 2004. This seems to have been concentrated in alcoholic beverage prices, which fell in 2004 and then stabilized in 2005; other categories had variable price performance.
In all of these cases, large economies and small, highly developed and transitioning from socialism, inflation rates are generally restrained. "Inflation" is defined as "generalized" price increases throughout an economy, but all four of these have uneven price behavior both across categories and across time. So inflation remained well under control in Europe through 2005, a remarkable development after two years of notable energy price increases, and in those using the euro, a weakening currency for much of that time.
| CPI (% Change) ( NSA except as noted) |
Month/Month
December/December
|||||||
|---|---|---|---|---|---|---|---|
| Dec 2005 | Nov 2005 | Oct 2005 | 2005 | 2004 | 2003 | 2002 | |
| France (Months SA) | 0.2 | -0.1 | 0.0 | 1.5 | 2.1 | 2.2 | 2.3 |
| ex Energy | 0.3 | 0.1 | -0.1 | 1.1 | 1.5 | 2.4 | 2.1 |
| Spain | 0.3 | 0.2 | 0.8 | 3.8 | 3.2 | 2.6 | 4.5 |
| ex Energy | 0.4 | 0.5 | 1.0 | 3.1 | 2.7 | 2.9 | 4.3 |
| Finland | 0.1 | -0.3 | -0.1 | 1.0 | 0.4 | 0.6 | 1.7 |
| Slovakia | 0.6 | 0.5 | 1.5 | 3.7 | 6.0 | 9.2 | 3.4 |
Carol Stone, CBE
AuthorMore in Author Profile »Carol Stone, CBE came to Haver Analytics in 2003 following more than 35 years as a financial market economist at major Wall Street financial institutions, most especially Merrill Lynch and Nomura Securities. She has broad experience in analysis and forecasting of flow-of-funds accounts, the federal budget and Federal Reserve operations. At Nomura Securites, among other duties, she developed various indicator forecasting tools and edited a daily global publication produced in London and New York for readers in Tokyo. At Haver Analytics, Carol is a member of the Research Department, aiding database managers with research and documentation efforts, as well as posting commentary on select economic reports. In addition, she conducts Ways-of-the-World, a blog on economic issues for an Episcopal-Church-affiliated website, The Geranium Farm. During her career, Carol served as an officer of the Money Marketeers and the Downtown Economists Club. She has a PhD from NYU's Stern School of Business. She lives in Brooklyn, New York, and has a weekend home on Long Island.
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