MADRID – As a result of the unprecedented price increase of electricity, groceries in Spain are again just as expensive as in 2008. Inflation reached a 4% increase in September compared to a year ago, the highest percentage in thirteen years.
This is evident from the consumer price index (CPI) published by the INE statistics office last Wednesday. It is not specified exactly which goods have become the most expensive. But the price increase is a direct result of the high electricity and fuel prices. Incidentally, the CPI increase is not only occurring in Spain but throughout Europe.
Top not yet reached
On average, inflation in Europe rose by 3.2% in August. In Belgium and Germany there was even a consumer price increase of 3% compared to a year ago. In September 2020, the CPI fell by 0.4% compared to the same month in 2019. This makes the difference between this year and last year even greater. Inflation is expected to increase further, especially in October and November.
Too few and too expensive raw materials
The high energy price resulting from a high gas price and the expensive CO2 emission rights is a worldwide problem. In Spain, a price has been registered on the wholesale gas market that is seven times higher than that of September last year. Apart from expensive energy, other problems are currently occurring within the industrial sector such as high raw material prices (especially for metals, chemicals, paper, and wood). These raw materials also ultimately have a negative influence on the consumer price.
Another problem is that logistical problems arise due to a shortage of raw materials and semi-finished products (including chips), while demand is increasing due to the increased activity since the progress of the vaccination campaigns.
Of a passing nature
However, analysts agree this rise in inflation will eventually be transient once all the causative factors have eased after a few months.