Spanish consumer prices rose by a more than expected 0.9% year-on-year in December, boosted by the base effects of an energy price rally over the last year, but a weak economy meant unemployment also rose.
Spain's December consumer price index (CPI) was above a Reuters forecast of 0.8% and up on the 0.4% increase in November, according to National Statistics Institute data released on Tuesday.
Separately, the Labour Ministry said the number of people registered as jobless hit 3.9 million in December, up 54,657 from the month before. Jobless claims had risen by a similar number in November.
Spain's economy remains deep in recession, with gross domestic product contracting for six consecutive quarters, helping keep inflation at low levels. It is not expected to emerge from recession until the first half of this year, according to the government.
While crude prices will feed inflation for a while, the weak economy could push inflation down again later next year, according to Silvio Peruzzo at RBS.
"We look for an even steeper increase in headline inflation in January, that will jump significantly above 1%," he said.
"That trend will continue for the first couple of months of the second quarter of 2010 and from that point on we expect inflation will partially retreat," Peruzzo said, adding that unemployment could top four million.
Before November, Spanish CPI held in negative territory for eight consecutive months.
(EurActiv with Reuters.)
