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Food prices rose more than 15 per cent in Spain last month

Food prices rose more than 15 per cent in Spain last month

Despite a tax rebate, inflation has caused grocery basket costs to soar

EDURNE MARTÍNEZ

Wednesday, 15 February 2023, 13:02

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Inflation is the biggest headache for consumers since the Ukraine war crisis began almost a year ago. Prices have risen so much that the government has had to take action and reduce or eliminate IVA (Spain's VAT - valued added tax) on basic foodstuffs.

Despite this measure, food prices rose by 15.4% in January compared to a year ago, according to data issued on Wednesday by the National Statistics Institute (INE). And, the figures show, food prices in January rose by 0.4% compared to December.

The Ministry of Economic Affairs said that if only the prices of foodstuffs with reduced or eliminated IVA are taken into account, a fall of 1.6% compared to December can be observed. Figures showing the prices in January compared to December reveal that bread has fallen by 0.2%, milk by 1.5% and eggs by 1.5%.

But these are not the only foods without IVA that fell in price in the first month of the year in Spain, according to the INE indicators. These show that fresh fruit fell 4.2% in price, pulses (-1.1%), potatoes (-1%), flour (-2.3%) and cheese (-0.7%). In addition, the reduction of VAT from 10% to 5% on olive oil led to a reduction in its price of 1.2% and that of pasta by 3.5%.

Consumer price index

The general consumer price index fell by 0.2% in its year-on-year rate in January to 5.9%, one tenth of a percentage point more than forecast by the INE. This was due to the fact that fuel prices have risen with the end of the 20 cents per litre bonus on 31 December. The inflation rate has also been boosted by telephone services and clothing, according to the latest data published by the INE.

But the underlying inflation rate continues to soar. In January it reached 7.5%, half a point higher than the previous month and the highest since 1986. It exceeds the general index by more than one and a half points.

The ministry led by Nadia Calviño said that this underlying rate "will reflect the decline in general inflation and energy costs in the coming months". It highlights the fact that the general rate has only risen by 0.2% despite the rise in fuel prices due to the end of the subsidy.

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