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Date Published: 30/08/2023

Inflation in Spain rises for the second consecutive month

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Increased fuel costs across Spain are the main reason inflation continues to skyrocket

Inflation in Spain rises for the second consecutive month

Consumers in Spain continue to feel the pinch of inflation, which has increased to 2.6% in August from the 2.3% registered last month. This is the second consecutive jump and is due mainly to rising fuel costs, according to the National Institute of Statistics (INE).

But while people are no doubt struggling with expensive prices, inflation still remains far lower than the crushing 10.5% it reached in August of 2022, the second-highest rate ever seen in Spain.

In addition, inflation “remains well below the euro zone, after dropping by nearly eight points in the last year," highlighted the Ministry of Economic Affairs.

In the last month alone, prices have grown by 0.5% in the monthly rate. While the INE blames fuel prices for the growth, we will have to wait until mid-September for the final figures.

The price of liquid fuels has also increased in contrast to the drop registered a year ago, while the increase in the cost of electricity is less than that experienced in the same month of 2022.

According to the latest data from the European Union Petroleum Bulletin, the cost of petrol and diesel has racked up seven consecutive weeks of hikes, standing at 1.709 and 1.601 euros per litre, respectively.

Since the beginning of July, when this new upward spiral in fuel prices began, a litre of unleaded has accumulated an increase in price of 7.34% and diesel has jumped by 11.3%.

The real impact of fuel on inflation becomes clear when its cost, along with that of unprocessed food, is stripped away. In this case, core inflation actually eased off slightly in August, dropping from 6.2% to 6.1%.

Core inflation peaked in Spain in February, reaching 7.6%, although its deceleration has been slowing down since then.

For the average consumer, the price of groceries continues to be one of the biggest worries. In July, food inflation remained in the double digits, with a year-on-year rate of 10.8%, well above the general index, but again, the September data will reveal more about the behaviour of grocery costs during an August marked by extreme drought.

With four months left in the year, the European Commission estimates that 2023 could close out with an average inflation of 4%, compared to 8.5% in 2022.

In other news: Record-breaking summer in Spain with 93 per cent of hotels booked out

Image: Freepik

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