Inflation in Spain lower than eurozone average for first time since March 2021

by Lorraine Williamson

According to Eurostat’s preliminary data, prices rose 0.7 points less than the average of these countries. And for the first time in many months, the harmonised consumer price indices (HICP) of Germany (10.9%) and Italy (9.5%) are higher than the inflation rate of Spain (9.3%).  

In the last 18 months, this difference has always been positive. In August, Spain’s 1.4-point inflation rate was the highest among the main eurozone economies, with an annual growth rate of 10.5%, compared with 9.1% in Italy, 8.8% in Germany and 6.6% in France. 

Of many products in the shopping basket, Spain’s price increase exceeds that of these three countries. Eurostat published August data of 187 sub-categories of products for these four countries. September statistics are not yet available. And in 55 of them (three out of 10), Spain shows the biggest increases when prices in August this year are compared with those of the same month in 2021. 

In one in three cases, price increases in Spain are higher than in Germany, France or Italy. And we are talking about basic items in the family diet.  

Fresh fruit, vegetables and potatoes 

One of these is fresh fruit. In the past year, its price rose 12% in Spain, four times more than in France or Germany. In the European Union as a whole, it rose more only in Slovenia and Slovakia, where increases were around 13%. 

Vegetables also rose much more in Spain than in Italy or Germany. The increase in egg prices is twice as high in Spain as in France. For potatoes, the 15% increase in Spain is 3 times higher than that in Germany. And 14 times higher than in France. Flours, cereals, pasta, frozen seafood, jams, honey, salads, spices, baby food and salt also show bigger increases in Spain than in the other three major euro economies. 

Olive oil and wine 

It is striking that the price of a national product like olive oil has risen almost twice as much (13%) as in Italy (7%), Spain’s main European competitor in this market. Wine prices have also risen 8% one year, compared with 5% in France and 4% in Italy, also major wine producers. 

Dairy, bread and meat 

For other major items in the shopping basket, such as cheese, yoghurt, milk, poultry, pork, beef and bread, Spain does not lead in terms of increases, but it is the country with the second highest price increases. 

These products are doing ‘well’ 

And although few in number, some items in the shopping basket are doing better in Spain. Fresh fish, for instance, rises at a similar rate to Italy, but 1.6 times less than in France or Germany. And the price increase for rice is half as high as in Germany or Italy. 

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Tea and other drinks  

Spain also leads in terms of tea price increases, with a 13% rise, 3 times higher than in Italy, France or Germany. The price of coffee rose more only in Germany.  

Beer, on the other hand, rose twice as much in price as in Italy and almost twice as much as in France. Alcohol-free beer rose 11% in price, compared with 5% in Germany. And our drink prices rose twice as much as in France.  

More increases 

In the case of furniture, washing machines, tumble dryers, dishwashers, glassware, plants and flowers, Spain also leads the way with price increases. In addition, services such as hearing aids, specialised doctors, dentists and veterinarians, as well as pet products, also rose sharply. Although the price of electricity has fallen in recent days, it has risen 61% in Spain over the past year, according to Eurostat data. The price of electricity rose eight times more than in France. This increase is almost four times higher than in Germany and eight times higher than in France, but lower than in Italy, where electricity prices rose 103%.  

The price of new cars rose twice as much in Spain as in Italy or Germany. Accommodation costs rose twice as much as in France or Germany and that of jewellery is double that in France. Insurance also rose more for Spaniards, especially health insurance. Baby items rose about 5%. In Germany, less than 2%. In France and Italy, they fell in price. 

Prices for care homes for the elderly rose almost 5%, compared with less than 2% in Italy and France. In Germany, they are 3.5% cheaper than a year ago. 

There are happy exceptions too 

Fortunately, Spain’s shopping basket does not all get more expensive than those of the largest eurozone economies. There are exceptions, including natural gas. Although it has increased in price by almost 24% in one year, this is less than half the increase in Germany or Italy (60%). Clothing and shoes also fared better in Spain. Women’s and men’s clothing rose by 0.5%, compared with increases of 3-4% in Italy and France. Only Italy saw a smaller increase in shoe prices. 

The biggest competitive advantage Spain had for buying PCs, prices they fell by almost 5%, in France by 3% and in Italy by 1%. In Germany, on the other hand, they rose by 8%. Prices of newspapers, watches and bicycles also fared better in Spain. The same goes for airfares, which have risen by 15% more than in Germany (12%), but still nowhere near the 40% rise in airfares in France or the 85% rise in Italy. 

Trend or not? 

It remains to be seen whether the change in the trend of the inflation differential between Spain and the eurozone will continue in the coming months, because as long as the prices of our shopping basket do not become cheaper than in these countries, or rise less, Spain will continue to face a competitive disadvantage vis-à-vis them. 

Also read: Spanish state earns well from increased food prices

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