Skip navigation

The effect of oil price fluctuations on Spanish inflation

Thumbnail
View
869,03 kB
Authors
Issue Date
25-May-2017
Abstract
This article analyses the impact of changes in oil prices on the consumer price index (CPI) in the Spanish economy from a historical perspective. The evidence provided reveals a substantial degree of pass-through of these changes to CPI components tied to heating and vehicle fuel (direct effect). However, the estimated effect of changes in crude prices on firms’ input costs (indirect effects) and on inflation or wage expectations (second-round effects) is, on average, moderate. Consequently, in the current situation, in the absence of fresh shocks in the expected path of oil prices, the rise in the CPI in early 2017 – linked to base effects prompted by the low price of this commodity for most of 2016 – can be expected to be essentially temporary and, therefore, consistent with a downward trajectory in inflation in the coming months
Notes
Artículo de revista
Publish on
Economic bulletin / Banco de España. Analytical articles
Economic bulletin / Banco de España , n. 2, 2017, 7 p
Other versions
Subjects
Appears in Collections:


loading