In September, inflation in Spain dropped to 1.5%, marking its lowest level since March 2021. This is a significant decrease from the 2.3% recorded in August, with inflation steadily declining over the last four months.
The fall is driven primarily by lower prices in fuel, along with modest reductions in food and electricity. According to provisional data from the National Statistics Institute (INE), this marks the largest single-month drop in inflation in the past year.
Core inflation also down
Core inflation, which excludes volatile items like energy and food, also decreased in September to 2.4%. This continued downward trend puts Spain’s inflation rate below the 2% benchmark set by the European Central Bank (ECB) for its monetary policy, reflecting broader economic stability.
The Harmonized Index of Consumer Prices (HICP), a measure used for international comparisons, also dropped. Standing at 1.7% it is seven-tenths lower than in August. This brings the annual inflation rate to its lowest point since 2020, far from the almost 9% seen in 2022 during the inflation peak.
Economic growth strong
In addition to positive inflation news, the INE confirmed that Spain’s economy grew by 0.8% in the second quarter of 2024. A growth driven by strong private consumption, exports, and investment. The government sees this as a positive indicator of the country’s resilience.
Government response
The Spanish government welcomed the inflation data. The Minister of Economy, Carlos Cuerpo, commented that it demonstrates the effectiveness of the country’s economic policies. He highlighted that Spain’s economic growth is four times higher than the eurozone average, while prices continue to moderate.
Cuerpo emphasised that this combination of economic growth and falling inflation is improving citizens’ purchasing power and helping to boost household incomes.
Also read: August inflation rate falls to lowest level