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ARCHIVED - Inflation rises at fastest pace in 40 years in Spain
The war in Ukraine and rising fuel prices in Spain have hiked up the rate of inflation
Inflation climbed to 9.8% in March, its sharpest increase in 37 years, due largely to rising energy prices driven by the war in Ukraine, according to a first official estimate published on Wednesday March 30.
The figure is "more than two points above that registered in February," when inflation had already reached 7.6%, the National Institute of Statistics (INE) said in a statement, making March "the highest since May 1985."
"It is a bad figure that affects our economy, our society, in particular the most vulnerable groups," President Sánchez said in a speech in Parliament.
The trend is mostly explained by the explosion in electricity and fuel prices, but also by the rise in the cost of food, fuelled by the Russian invasion of Ukraine, which has resulted in "a kind of energy ‘shock’," according to the governor of the Bank of Spain.
As a consequence, "the country is poorer than it was a few months ago, because there are a series of energy products that Spain does not produce but that it needs to produce the rest of the goods and for final consumption, and these products are more expensive today", Mr Hernandez de Cos explained.
To try to soften the impact of the war, the Spanish government announced a plan of direct aid worth 6,000 million euros for homes and companies on Tuesday March 29, which includes a subsidy of 20 cents on fuel, a 15% increase in the minimum vital income for vulnerable families, and an extension until June 30 of tax reductions on electricity bills.
"We are convinced from the government that the national response plan and especially the agreement reached in Brussels to set a reference price for gas... will allow us in the near future to bend the curve and stabilise the evolution of the cost of living," President Sánchez said.
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