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ARCHIVED - Inflation reaches highest level in Spain in 9 years
Increased electricity, housing and food expenses have all contributed to Spain experiencing record levels of inflation in August
With rising petrol, diesel and electricity prices throughout Spain there is no doubt that the average consumer has felt the pinch in recent months, and the latest Consumer Price Index (CPI) stood at 3.3 per cent in August, the highest figure recorded since October 2012. The rise in inflation has mainly been caused by the record-breaking soar in electricity costs, which pushed the CPI four tenths of a percentage point above the figure recorded in July.
The CPI is the most widely used tool for measuring inflation and deflation and works by evaluating the average change in price of a range of goods and services over a defined period of time.
According to the National Institute of Statistics (INE), if the Spanish government hadn’t decided to reduce the VAT on electricity from 21 to 10 per cent or suspend the 7 per cent electricity generation tax, the inflation figure would actually have skyrocketed to 3.6 per cent – a high last seen in April 2011.
There are several other areas where rising costs are more pronounced, including housing, whose annual variation reached 11.5 per cent in August, which is more than two percentage points higher than in July. Food and non-alcoholic beverages also saw an increase of 0.2 per cent above July, mainly due to rising food prices, compared to a marked decrease the previous year.
After dropping in price in 2020, the cost of buying a car has once again increased, along with a rise in fuel prices in Spain.
Overall, the CPI increased by 0.5 per cent in August, while clothing and footwear actually registered a negative rate of -1.1 per cent due mainly to end of summer sales and promotions.
Regarding the annual variation rate of core inflation, which is a general index that excludes non-processed food and energy products, an increase of one tenth of a percentage point was reported, which is more than two and a half points below the General CPI. This is the highest difference between the two rates in 35 years.
By Spanish communities, the annual rate of the CPI increased in all regions in August compared to July, with the highest jump recorded in the Canary Islands, with an increase of 0.6 per cent. Catalonia, Castilla y León and Navarra registered the lowest increases in their annual rates, with a rise of 0.3 per cent.
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