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ARCHIVED - From beer to bread: price hikes expected in Spain in 2022
Inflation will continue to push prices up in Spain well into next year
The average consumer in Spain will have noticed a considerable pinch in their pocket this year as skyrocketing inflation has pushed up the prices of everything from electricity and gas to household goods, clothes and toys. All this has generated a considerable increase in the Consumer Price Index (CPI) and the experts have warned that costs will continue to rise well into 2022.
In fact, the Bank of Spain has reported that 60% of companies in Spain plan to raise their prices next year, on top of the fact that the cost of housing (18%), transport (10.8%), hospitality (2.5%) and food (3%) have already jumped exponentially in 2021.
Grocery staples
Globally, the lack of fuel, microchips and other essential raw materials has led to far more expensive shopping baskets and the cost of many household staples will be affected by the increased cost of wheat next year.
The continuous rise in the cost of electricity has had a knock-on effect on production costs, which of course are passed on to the consumer. As a result, shoppers will pay up to 21.2% more for basic items such as bread, pasta, beef, chicken, milk and eggs.
Beer and tobacco
For many years Spain has been trying to crack down on tobacco use and unsully the country’s name as a cheap source of cigarettes. To this end, the government plans to increase the income obtained from tobacco taxes in 2022 by 5.5% with the aim of raising close to 3 billion euros for the State coffers.
The price of cereals is creeping up across the globe which is going to have a direct impact on alcohol costs – another pretty cheap commodity in Spain. In fact, global giant Heineken has announced that it plans to raise its prices for 150,000 hospitality customers from January 1.
Vehicles
The automotive industry has been one of the hardest hit this year, and Faconauto estimates that car dealers have accumulated an order pool of nearly 250,000 vehicles due to delivery delays caused by the worldwide semiconductor shortage.
The news doesn’t get any better for 2022 as Registration Tax in Spain is set to increase on January 1, meaning that cars will cost an average of between 800 and 1,000 euros more.
The situation is also grim for existing drivers as crude oil prices, resurgent fuel demand and taxes will continue to drive the cost of petrol and diesel up in the new year. Crude oil is becoming more expensive all over the world as governments pull their investments from fossil fuels and put their support behind renewable and green energy sectors.
Electricity
The price of electricity has broken records this year, especially in recent weeks, due to the increase in CO2 rights globally and the price of natural gas. This trend shows no sign of changing in the short-term and energy bills are expected to continue to rise well into 2022.
Housing
The price of buying a home will increase by around 4% next year due to the rise in costs of raw materials and the blocking of international trade. However, CaixaBank has predicted that this year's 'boom' for acquiring a property will moderate throughout 2022, so the market should return to levels similar to those prior to the pandemic.
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