Price rises slow down on the Costa as overall inflation falls to 2.6%

Prices are not spiralling quite as much out of control on the Costa del Sol as they were. The annual inflation rate was 2.6% in Malaga province last month, which means inflation is back to April 2021 levels. In May this year, annual inflation was 4.1% and a year ago it was 10.6%.

Nationally, the inflation figure was 1.9% in June. Spain has become the first country in the Euro zone area to bring its inflation rate below 2% – the European Central Bank’s stated target, even though in Malaga the figure remains significantly above this level at 2.6%.

This difference between the national picture and Malaga province also happened last month but the gap is closing.

In May, while prices in Malaga were rising at an annual rate of 4.1%, in Spain overall, the figure was 3.2%, a difference of 0.9 percentage points, which in June has been reduced to 0.7 points, almost half that of February, when the consumer price index (CPI) in Malaga was 1.2 points higher than in Spain, which stood at 6%.

Both in the province and in the country, the latest inflation figures represent a significant easing with respect to the worst moments both this year and in 2022. In Malaga, the CPI has fallen by almost 9 percentage points compared to the highs set in July 2022 at around 11.4%.

Food price inflation specificallyhas also slowed, but it is still in double digits. Food and non-alcoholic beverages both in the country and in the province and in Andalucía rose by 10.3% last month. In Malaga, their rise in May had been 12.6%.

According to Spain’s national statistics institute (INE) analysis, the small slowdown in food-price inflation is due to the fact that fruit, bread, cereals and meat have increased less than in June 2022. In addition, the stability of the prices of milk, cheese and eggs has also contributed to this. And thirdly, lower prices for pulses and vegetables have also played a part.

According to Spain's national statistics institute (INE) analysis, the slowdown in the rate of increase of food prices is due to the fact that fruit, bread, cereals and meat have increased less than in June 2022. In addition, the stability of the prices of milk, cheese and eggs has also contributed to this. And thirdly, lower prices for pulses and vegetables have also contributed.

Given this identical evolution in these basic goods during the month of June, the explanation for the inflation differential that persists between Malaga and Spain must be sought elsewhere. For example, in the prices of restaurants and hotels, which increased by 8.4% in Malaga, compared with an increase of 6.8% in Spain as a whole. In addition, alcoholic beverages and tobacco (9% in Malaga compared to 8.1% in Spain). Education also rose at a higher rate in the province (3%, compared to 1.6%) than in the country as a whole, and leisure and culture (5.7% compared to 5.2%).

But in Malaga housing and its supplies (water, electricity and gas) became cheaper: the fall was 13.5%, compared with 12.7% for the country as a whole. In fact, the INE highlights the progress of this component of the CPI as one of the keys to the recent easing of prices in all regions. And a third element could be included: transport, which fell by 7.6% in the country due to the evolution of fuel and lubricant prices, although in Malaga the fall was limited to 6.3%.