Rampant inflation is driving increased prices in a year-long upward rally that seems to have no end in sight despite the Spanish government's measures to deal with the effects of the war in Ukraine. The year-on-year rate of the Consumer Price Index (CPI) continues to rise, and now stands at 10.8 per cent – its highest level since September 1984, according to advance figures published on Friday, 29 July, by the INE.
Inflation has risen for three consecutive months. In May, it climbed to 8.7 per cent, and in June 10.2 per cent, despite the implementation of the gas cap and other government measures to contain prices. The increase in prices is mainly due – according to the statistics agency – to the rise in the prices of food and non-alcoholic beverages and electricity.
The slight fall in fuel prices, which in recent weeks has dropped below the two euros per litre mark, has had little impact. Similarly, the estimated annual rate of change in core inflation (the general index excluding unprocessed food and energy products) also increased by six tenths of a percentage point to 6.1 per cent, the highest since January 1993. This is an indication that the rise in prices now affects most products and that it is becoming persistent.
The estimated annual rate of change of the Harmonised Index of Consumer Prices (HICP) also stands at 10.8 per cent, eight tenths of a percentage point higher than that recorded the previous month. The estimated monthly change of the HICP was -0.5 per cent.
Inflation began to climb around the end of last summer, driven mainly by the price of energy, which caused the average annual CPI to close last year at 3.1 per cent after having been negative for part of the year.
But what initially seemed to be a very temporary increase whose effects would disappear in spring, is dragging on for far too long, fuelled by the effects of the war in Ukraine, and there is a growing concern that the upward trajectory of prices will become chronic.