Spain inflation: Iran war pushes prices up by 3.3% in March

The CPI in Spain rose to 3.3% in March, according to data from the national institute of statistics (Ine). This figure exceeds inflation in March 2022, after the Russian invasion of Ukraine triggered food and energy prices to rise.

The figure is lower than the forecast of the Funcas platform (3.6%), but higher than that of BBVA research analysts (2.9%).

Meanwhile, core inflation , which excludes energy and processed food prices, remained in line with the February figure (2.7%).

The Ministry of Economy blames this rise on the energy shock resulting from the conflict in the Middle East, which has raised the general indicator by one percentage point compared both with February's data and March 2025.

"The war has led us to modify our inflation forecasts," Funcas experts announced a few weeks ago, predicting that the CPI could rise to 4% in the coming months if the conflict in the Persian Gulf does not end. This Thursday, the OECD estimated the annual rate for Spain at 3%.

The rise in inflation has direct impact on the economy: the increase in prices reduces households' spending capacity by diverting resources that would normally be used for consumption, which ends up weighing on growth.

To cushion this impact, the government has launched a package of tax cuts on energy that, according to Funcas, will allow an average saving of around 90 euros per fill-up by June. The Ministry of Economy says that, although fuels have started to become cheaper as a result of these measures, they are still subject to upward pressure due to the changes in international markets. Diesel has felt the biggest impact of the rise in oil prices, transport and refining margins.

Despite this uptick, inflation remains well below the levels recorded right at the beginning of the war in Ukraine in February 2022, when it was close to 11%. Prices had already started to rise sharply, even before the Russian invasion.