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Edurne Martínez
Madrid
Thursday, 30 March 2023, 15:03
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March inflation data for Spain was published today (30 March) and it was surprisingly good.
The annual consumer price index plummeted to 3.3%, down from 6% in February.
This large decline was being put down to a so-called ‘step effect’. It does not mean that prices have eased to any great extent since last month. Rather, when compared to this March, last year in March, when war broke out in Ukraine and energy and raw material prices soared, prices then soared virtually overnight.
In March last year, annual inflation rose to 7.6% and from that point onwards continued upwards until reaching a peak of July (10.8%).
The government’s national statistics institute (INE) attributes the lower growth in prices to the recent fall in the cost of electricity and fuel, compared with the rise in the same month in 2022.
Government minister for Economic Affairs Nadia Calviño had already predicted that inflation would slow in March.
Today, sources in her ministry said the “sustained” fall in the price of electricity from measures adopted by the government to contain prices have been “key” factors for “Spanish inflation being among the lowest in Europe”.
However, underlying annual inflation - which does not take into account fresh produce or energy - remains almost identical to February, down only one tenth of a percentage point at 7.5%, one of the highest rates ever.
The INE data did not reveal which products have become more expensive, information that will be available in two weeks. This will show whether the IVA sales tax decrease on certain essential foods is having its effect in the third month since it came into effect.
The government is still backing its lower IVA policy despite some studies showing it is having little effect.
The latest data available for the month of February points to a 16.6% annualrise in food prices, with fruit and vegetables topping the list.
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