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ARCHIVED - Inflation in Spain plummets to 7 per cent due to drop in electricity and gas
The price rise in staple food items continues at an alarming rate all across Spain
After inflation reached a record high of 10.8% in July the cost of living crisis in Spain may be gradually losing its grip, thanks largely to a drop in the price of gas and electricity. For the third consecutive month the CPI (Consumer Price Index) has levelled out and dipped to 7.3% in October.
However, most worryingly for the average consumer, food prices continue to climb: the cost of groceries shot up by 15.4% last month, the biggest jump since 1994.
Stabilising petrol and diesel prices were the main reason for lower inflation in September, but the current heroes are gas and electricity, which have pulled the CPI down 1.6 points due to the impact of the Iberian exception and the successive tax cuts applied by the government.
The good news, according to the Minister of Economic Affairs Nadia Calviño, is that inflation should remain in and around 7% during November and December, and it’s likely “that in 2023 it will continue on a downward path.”
While the government’s shock measures have undoubtedly proven effective, rumours that the 20 cent per litre fuel discount will be scrapped next year for all but the most vulnerable are sure to be making consumers nervous. Added to this is the fact that wages in Spain are rising well below inflation, meaning that the loss of household purchasing power is the most severe in four decades.
The income issue is naturally hitting the poorest households the hardest, and the gap between low and high earners has reached its highest point since 2006. The crisis is taking its toll on the most vulnerable since they are typically the ones who put more of their overall spending towards food and energy, precisely the costs that have risen most in recent months.
Image: Pixabay
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