Much larger than expected drop in Spanish CPI in March

The cost of living in Spain fell sharply in March as gasoline, fuel oil and electricity prices retreated instead of rising as they did during the same month one year ago.

Spain's consumer price index slowed to a 2.3% year-on-year pace of gains, which was eight tenths of a percentage point less than in the month before, according to a preliminary estimate from Spain's National Office of Statistics, INE.

Headline CPI was unchanged in comparison to February.

In harmonised terms (HCPI) the drop was larger still, with the annualised rate of CPI dropping by nine tenths of a percentage point from one month to the next to reach 2.1%.

Economists had penciled in a much smaller drop, from the annualised 3.0% pace observed in February to 2.8%.

Versus February HCPI was up by 1.1%, as the methodology used to estimate changes in the shoe and clothing segment in the non-harmonised CPI measure differed.