28 Feb, 2023 @ 11:56
1 min read

Inflation rate in Spain is on the up again as electricity bills and food and drink get more expensive

Supermarkets in Spain are on track for a record year after seeing profit margins soar

Inflation is still stalking the Spanish economy as the latest data puts price increases from February last year at an annualised rate of 6.1%.

This represents a faster pace than the 5.9% increase recorded in January and is above the 5.7% forecast by analysts polled by international news agency Reuters.

The information comes from preliminary data released on Tuesday by the National Statistics Institute (INE).

Spain had previously managed to reign in inflation during the second half of 2022, registering the lowest figure in the euro zone by the end of the year. 

However, Spain’s price index has now risen for two consecutive months in annual terms, largely due to higher electricity and food and drink prices.

The INE data revealed that core inflation, which strips out volatile fresh food and energy prices, was 7.7% year-on-year in February, a higher rate than the 7.5% recorded in January. 

The monthly change in prices from January to February was 1%, meaning prices have become a percentage point more expensive in just thirty days.

The inflation statistics will come as a shock to analysts, who had expected the rate to fall as energy prices have started to come back down after the shock of the invasion of Ukraine.

Despite this, analysts predict that any future decline will be slow, as companies are reluctant to obey market forces and reduce prices once they have put them up. 

The persistent high core inflation rate, combined with a resilient eurozone economy, makes it easier for companies to implement new price increases, further contributing to the persistence of high core inflation.

The European Central Bank (ECB) is expected to raise interest rates further in the coming months, which could hamper economic growth, particularly in sectors such as real estate and business investment. 

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Walter Finch

Walter Finch, who comes from a background in video and photography, is keen on reporting on and investigating organised crime, corruption and abuse of power. He is fascinated by the nexus between politics, business and law-breaking, as well as other wider trends that affect society.
Born in London but having lived in six countries, he is well-travelled and worldly. He studied Philosophy at the University of Birmingham and earned his diploma in journalism from London's renowned News Associates during the Covid era.
He got his first break in the business working on the Foreign News desk of the Daily Mail's online arm, where he also helped out on the video desk.
He then decided to escape the confines of London and returned to Spain in 2022, having previously lived in Barcelona for many years.
He took up up a reporter role with the Olive Press Newspaper and today he is based in La Linea de la Concepcion at the heart of a global chokepoint and crucial maritime hub, where he edits the Olive Press Gibraltar edition.
He is also the deputy news editor across all editions of the newspaper.

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