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ARCHIVED - Inflation in Spain soars to highest value in 13 years
Consumer costs in Spain have risen by 70% since last August
After inflation rates in Spain broke new records just two weeks ago, the unprecedented rise in the cost of electricity throughout Europe in recent months has once again triggered the price of consumer products to skyrocket to a level which has not been registered in the country since September 2008.
According to the advanced data released by the Consumer Price Index (CPI) on Wednesday September 29, inflation soared in September to 4% year-on-year, the highest rate in 13 years – that’s a 70% growth since last August.
While the National Statistics Institute (INE) has pointed out that this advanced data doesn’t actually give a break-down of which products have become more expensive, all indicators currently point to the rise of electricity prices in the wholesale market, and to a lesser extent, the growing costs of petrol, diesel and other vehicle-related products.
In addition, core inflation – which estimates general consumption outside of energy prices and unprocessed food – has jumped up 30% compared to last month and now stands at 1%, three points below the general CPI. According to the INE, the difference between these two indicators is the highest since records began.
The rising cost of consumption isn’t something unique to Spain, as inflation has shot up across all of Europe, hitting an average rate of 3.2% in August. Countries like Germany and Belgium have seen prices rise above 3% compared to last year.
Of course, comparing this year with 2020 gives us pretty skewed data, as lockdown and the temporary closure of non-essential retailers during the coronavirus pandemic naturally led to a huge decrease in public spending. In fact, the CPI fell to -0.4% in September compared to 2019, and if the current factors driving prices continue until the end of the year, it is almost certain that inflation will in turn increase.
In addition to the rising electricity prices, mainly driven by the increased cost of gas and CO2 emission rights experienced around the globe, the fluctuating inflation rates have other contributing factors, such as price hikes for certain raw materials like paper and wood products. Transport costs have also surged due to a worldwide shortage of key components such as semiconductors, a problem which has been compounded by increased demand now that much of the world is entering into a post-pandemic ‘new normal’.
In any case, most analysts agree that this inflationary drift will be temporary and that it will gradually dissipate as these factors are mitigated in the coming months.
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