During the month of August prices in Spain fell compared with July, but only slightly. Inflation dropped from 10.8%, the highest in 40 years, to 10.4%, still above two digits for the third consecutive month, according to figures from the National Institute of Statistics (INE) issued this Tuesday morning, 30 August. The slight fall in the CPI was due to a drop in fuel prices, which has been gradual since reaching a record high in June.
The INE says the main causes of high inflation are still energy and fresh food prices, together with hospitality and package holidays, but all basic shopping items have been affected by increases in electricity and problems with the supply chains.
This is shown by the underlying inflation rate, which was 6.4% in August. This figure does not include energy products or fresh foods, and experts believe it will continue to be high for some time. This is three-tenths of a percentage point higher than in July, a level unseen for decades. In fact, underlying inflation just one year ago was 0.7%.
The Spanish government considers that inflation has now begun to moderate, and has explained in a statement that the peaks were in March, when Putin began the war in Ukraine, and in June, when Russia reduced the supply of gas to Europe.
“The slowdown in inflation coincides with the implementation of the government’s packages of measures, which shows that these are effective,” it said.
The government believes there will be a continuing drop in inflation in the forthcoming months, and it will be at “more normal” levels next year.