Inflation: Spain again recorded the highest increase among the major eurozone economies for April

Inflation in the eurozone accelerated by four-tenths of a percentage point compared to March, when it stood at 2.6 per cent. This is the largest increase in the cost of living in the eurozone since September 2023. It can be explained by the impact of the Middle East conflict on energy prices, which have risen sharply since the start of the war.

Across the European Union , the year-on-year inflation rate reached 3.2 per cent in April, also four-tenths of a percentage point higher than the 2.8 per cent recorded in March.

The spike in the eurozone's inflation rate for April reflected a 10.8 per cent year-on-year increase in energy costs, much higher than the 5.1 per cent increase recorded in March. Meanwhile, fresh food prices rose by 4.6 per cent, four-tenths of a percentage point more than the previous month.

Among EU member states, the lowest annual inflation rates were recorded in Sweden (0.5 per cent), Denmark (1.2 per cent) and the Czech Republic (2.1 per cent). As for the highest, these were Romania (9.5 per cent), Bulgaria (6.0 per cent) and Croatia (5.4 per cent).

In the case of Spain, the harmonised inflation rate stood at 3.5 per cent in April, one-tenth of a percentage point higher than in March, resulting in an unfavourable differential with respect to the eurozone average of half a percentage point.

"Spain is beginning to show a situation that is unusual in Europe: an economy that is growing above the average and that, precisely because of this strength, maintains higher inflation levels than the rest of the bloc," said Manuel Pinto, market analyst at XTB.

According to this expert, Spain's core inflation of 2.8 per cent in April, which is four-tenths higher than that of the European Union (2.4 per cent), demonstrates that the difference cannot be explained solely by the rise in energy prices: "Spanish inflation continues to be above the European average mainly because Spain is showing considerably higher economic growth than the other major economies in the eurozone and this is generating more domestic inflation that is less dependent solely on energy."

Thus, Spain's economic growth is being supported by tourism, employment, immigration and strong domestic consumption, which is putting pressure on sectors such as services, hospitality, leisure, textiles, transportation and housing.

Analysts agree that the economic outlook will depend on how the conflict unfolds, specifically on when the Strait of Hormuz will reopen. "If the strait remains closed for longer, supply pressures will intensify and amplify the production losses caused by the war," stated Martin Wolburg, an economist at Generali AM.

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