Lorraine Williamson
Spain has started 2026 with a welcome slowdown in price growth, as the national inflation rate eased to 2.4% in January, marking its sharpest fall in almost a year. The drop brings cautious relief for households still grappling with high living costs after several volatile winters.
The moderation is largely linked to energy prices
Energy offers breathing space — for now
Lower oil prices and more stable electricity tariffs have been the main drivers behind January’s cooling figures. For many families, this has translated into slightly lighter bills at the petrol pump and fewer shocks on monthly energy statements.
However, economists warn that energy remains the most unpredictable component of Spain’s inflation basket. Any renewed geopolitical tensions or supply disruptions could quickly reverse recent gains, particularly as demand rises later in the year.
Spain´s growth forecast for 2026
Food prices remain stubborn
While energy costs have eased, food prices continue to weigh heavily on household budgets. Basic staples such as meat, dairy and fresh produce remain well above pre-pandemic levels, even if monthly increases have slowed.
Supermarket inflation is no longer accelerating, but it is not falling meaningfully either. For lower-income households and pensioners, food spending remains the most visible reminder that inflation has not disappeared — it has simply changed shape.
Services and housing costs still rising
Another area resisting downward pressure is services, including hospitality, transport and personal care. Wage adjustments, labour shortages in some sectors, and strong tourism demand are keeping prices elevated, particularly in urban and coastal areas.
Housing-related costs also continue to rise unevenly across Spain. Rent inflation remains acute in high-demand regions, reinforcing the sense that official inflation figures do not always reflect lived experience.
What this means for households in 2026
A 2.4% inflation rate places Spain closer to the European Central Bank’s long-term target, easing fears of renewed monetary tightening. For borrowers, this may strengthen expectations that interest rates will stabilise rather than rise further.
For households, however, the message is more nuanced. Price growth is slowing, but prices themselves are not falling. Many families will still feel squeezed, especially as wages have not risen evenly across sectors.
A fragile improvement
January’s figures offer a measure of reassurance, but not a full reset. Spain’s inflation story in 2026 is likely to be one of gradual easing rather than rapid relief, shaped by energy markets, food supply chains and broader European economic stability.
For now, inflation is cooling — but it remains firmly part of daily life.
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