Annual inflation in the Balearics slightly lower than Spanish average

THE Consumer Price Index rose by 0.3 per cent in the Balearics in May, slightly higher than the national average, bringing inflation so far this year up to 1.6 per cent, and for the 12 months from May 2004 to 2.6 per cent. According to figures released yesterday by the National Institute of Statistices, prices throughout Spain rose by 0.2 per cent in May, inflation in the first five months of the year was 1.8 per cent and the 12 months from May 2004 was 3.1 per cent. Prices in the Balearics went down by 0.8 per cent in leisure and culture, and by 0.2 per cent in “others” (jewellery, cosmetics, services and insurance). They remained stable in food and drink, tobacco, commmunications and education. The biggest increases were in medicine (0.6 per cent) and household goods (0.5 per cent).
The region where prices went up most in May was Navarre (0.5 per cent) and the lowest increases (0.1 per cent) were in Castilla-Leon, Extremadura, Madrid, Murcia and the Basque Country. The powerful UGT trade union said the figures for May reflected a moderation in inflation, but it was still “insufficient” and there were still major problems to be tackled. A spokesman said that workers whose agreements did not have a revision clause were losing purchasing power.
Mepimed, the committee of small and medium-sized businesses of the Mediterrranean, drew attention to the negative effects an increase in costs would mean for the tourist sector, particularly as “results for this summer are not expected to be good.” A spokesman for the committee, which covers the Balearics, Catalonia and Valencia, warned that the drought “could be a risk factor for the stability of food prices.” This would have an effect on consumer prices in the middle of the year, and in the costs of the tourist sector during the high season.
He added that the negative effects would be particularly felt by small firms in areas dominated by the major tour operators.