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Date Published: 29/04/2026

Inflation in Spain eases to 3.2% in April despite the war in Iran

Lower electricity bills have helped cool price rises even as fuel costs continue to climb across Spain

Inflation in Spain eased to 3.2% in April, surprising analysts who had expected a higher reading because of the ongoing energy pressure linked to the conflict in Iran.

The latest preliminary Consumer Price Index data, released this Wednesday, shows a two-tenths of a percentage point drop compared with March. Officials explained that the fall is mainly due to lower electricity prices and the effect of tax cuts on fuel and electricity introduced by the government on March 20.

The government measures include a reduction in VAT on electricity from 21% to 10%, a cut in the special electricity tax from 5% to 0.5% and a temporary suspension of the production tax. These changes remain in place at least until June 30, although the government has not ruled out extending them if the energy situation continues.

Analysts at Funcas had previously expected inflation to come in at around 3.5% in a best-case scenario, making the April figure a more positive outcome than anticipated. The data also suggests inflation has eased slightly from March, which was the first month to fully reflect the impact of the conflict.

Core inflation, which strips out energy and unprocessed food prices, also edged down by one-tenth to 2.8%. While still above the 2% target used by central banks, it remains relatively contained compared with recent peaks.

Electricity costs have played a key role in keeping inflation lower than expected. Wholesale electricity prices averaged €41.7/MWh in April, according to market operator OMIE data, broadly in line with March and lower than levels seen earlier in the year.

However, fuel prices are still pushing in the opposite direction. Data from the Fuel Geoportal published by the Ministry for Ecological Transition shows diesel stood at €1.74 per litre this week, slightly below the level recorded when discounts were introduced but gradually edging back up. Petrol was priced at €1.53 per litre, around 5.7% lower than on March 22.

The government pointed out that inflation could rise again once the current tax cuts expire. If the measures are not extended beyond June 30, prices are expected to increase from July as taxes return to normal levels, although officials say it’s still too early to confirm what will happen.

Forecasts for inflation over the year have also been revised. The government now expects an average rate of 3.1% for 2026, broadly in line with estimates from the Bank of Spain and the IMF at around 3%, and the Independent Authority for Fiscal Responsibility at 3.2%. Funcas remains slightly higher at 3.5%.

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