Spain Maintains Five pct Inflation Target

Spanish Secretary of State for the economy Guillermo de la Dehesa said the government maintained its five pct inflation target for this year although a 0.6 pct increase in March pushed the rise in the year on year consumer price index to 6.3 pct.

De la Dehesa said the March rise, announced today by the National Statistics Institute, was not entirely satisfactory but acceptable.

The year on year rate at the end of February was six pct. Prices rose 8.3 pct last year.

The March rise included a 0.05 pct increase correcting an error in last January’s consumer price index. Economists had earlier said the error could have been as high as 0.2 pct.

De la Dehesa said seasonal increases in food prices pushed the index up in March and he expected the rate to be lower in April.

The Communist-led Workers Commissions union said the March price rise showed inflation was going up again and the government looked increasingly unlikely to meet its five pct target.

The Workers Commissions said the inflation trend fuelled unions’s claims to wage increases beyond the government’s recomendation to limit wage rises at around five pct.

Spain is being affected by a two-month-old wave of strikes for wage rises. Government officials note wage settlements so far this year have yielded average increases upwards of six pct, while unions say the figure is higher then seven pct.