Inflation in Spain increased due to higher food prices

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inflation

The Consumer Price Index (CPI) in Spain rose to 3.3% in April. That is a tenth higher than in March, according to data from the Spanish statistics agency INE. In contrast, core inflation (inflation without taking food and energy prices into account) fell by four-tenths to 2.9%. That is the lowest level since January 2022.

Food price inflation rose to 4.7%, four-tenths higher than the previous month. This increase is mainly due to higher prices for fruit, legumes and vegetables, after a decline in the same month of 2023. Furthermore, house prices increased by 2.5 percentage points on an annual basis to 4%. According to INE, this is due to rising gas prices, compared to a decline in April last year.

Food prices

The pace of price increases in supermarkets and shops has been reduced by almost a quarter compared to the maximum of 16.6% reached in February last year. This moderation in food inflation is particularly relevant for lower-income households. As one earns less, purchases in supermarkets or stores represent a higher percentage of total expenditure. This is where the main concern lies. For this reason, the VAT reduction on basic foodstuffs will remain in force until June, together with discounts on public transport.

Price drops

Despite the general price increase, there were also sectors where prices fell and thus had a negative impact on inflation. This includes recreation and culture, with an annual inflation of 2.2% (1.6 percentage points lower than last month), mainly due to falling prices of holiday packages. Inflation in the hospitality industry also fell to 4.8%, down seven-tenths year-on-year, thanks to discounts on holiday packages and accommodation.

Cogesa Expats

Rising inflation continues

The annual CPI rose for the second consecutive month in April, with inflation near the level it started the year at (3.4%), after rising four-tenths in March. This trend continues the upward trend in inflation. Core inflation fell by four-tenths to 2.9% in April, the lowest level since January 2022 and the first time since November 2022 that it has been lower than the headline CPI.

Higher clothing and footwear prices

The monthly variation of April compared to March was 0.7%. Particularly driven by higher prices for clothing and footwear due to the new spring-summer collection (an increase of 7.1%). Prices for accommodation and food also rose in almost all categories, but especially those of fruit, legumes, vegetables, meat, and fish and seafood.

Regional differences

At regional level, the CPI was highest in Galicia (3.7%), the Balearic Islands and Castilla-La Mancha (3.5%) and the Basque Country, Extremadura and Ceuta (3.4%). Inflation here is above the national average everywhere. The lowest recorded CPIs are found in Andalucia, Aragon, Asturias, the Canary Islands, Castilla y León, Catalonia and the Comunidad Valenciana. These regions were all at the national average of 3.3%.

ASSSA

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