PRICES in the Balearics rose by 0.3 percent in October, seven decimal points less than the national average, with the accumulated inflation rate running at 2.6 percent and the year-on-year figure (for the last 12 months) at 3.2 percent.
According to the latest Price Index (IPC) made available yesterday by the National Institute of Statistics (INE), Balearic prices rose mostly in shoes and clothing (2.7 percent) and equipment for schools (1.2 percent). Prices fell in leisure and culture (-1.2 percent); hotels, cafés and restaurants (-0.4 percent); food and non-alcoholic drink (-0.2 percent); and alcoholic drinks and tobacco (-0.1); but remained stable in communications.
In the first ten months of the year (accumulated rate), prices rose above all in transport (7.8 percent) and hotels, cafés and restaurants (5.2); and fell in shoes and clothing (-3.9 percent) and leisure and culture (-2.5 percent).
In the last 12 months (year on year rate), prices fell in leisure and culture (-3 percent) and communications (-0.3); and rose particularly in transport (7.9 percent); hotels, cafés and restaurants (5.1), and equipment for school, alcoholic drinks and tobacco (4.8 percent). Meanwhile, the economic department of the Confederation of Balearic Business Assocations (CAEB) has welcomed the fact that the inflation rate in the Islands over the past 12 months is four decimal points under the State average, meaning that the Balearics is categorised as one of the least inflationist regions of the country. It warned, however, that the negative impact of fuel price rises will begin to be felt in all production sectors.
Union Reaction
The General Workers Union (UGT) said yesterday that the low inflation rate registered for October in the Balearics, was due to the reduction in family spending.
The Union claim that in the second quarter of the year, 65 percent of families in the region acknowledged having difficulties in seeing their way financially to the end of the month.
Union action secretary, Manuel Pelarda, warned that the price restraint in the Balearics is not good news. He criticised the previous central government under the Partido Popular for having forecast a two percent national inflation rise for 2004, when the year-on-year rate (for the past 12 months) has already reached 3.2 percent. This, he claimed, demonstrates that central government economic policy is unrealistic.
Pelarda said that the government in Madrid should react to the rise of the cost of living index above the official estimate, by making an amendment to the budget which incorporates a higher increase in pensions and salaries.
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