Spain’s inflation rate in December rises to 2.8% due to fuel price hikes

FUEL price hikes have led to Spain’s inflation rate closing the year at 2.8%- up 0.4% on November.

Provisional December figures from the National Statistics Institute(INE) published on Monday showed this month’s rate as being below last year’s average of 3.6%

The cost of fuel was falling in December 2023, and prices for leisure and culture had risen compared to 12 months earlier.

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Core inflation, which does not include the most volatile items such as energy and fresh food and is seen as a better indicator of price trends, stands at 2.6%- two tenths more than November but lower than the 3.8% at the end of 2023.

The Economy Ministry said in a statement: “Throughout the year, inflation, both headline and core, has been falling continuously.”

“This reduction highlights the effectiveness of the economic policy measures put in place, which are making it possible to reconcile higher growth among the main economies of the euro zone and a continued reduction in inflation,” it added.

With December, prices have risen for three consecutive months- compared to 1.5% in September.

The Ministry emphasised the impact of fuel price hikes coupled with leisure.

Economist, Raymond Torres, from Funcas said: “December’s figure is not very good,” but added that he did not believe that inflation was going to climb.

“There are underlying trends that complicate the task of getting towards 2%, such as the lower euro rate against the dollar, which increases import costs and a certain resilience in the prices of services, which have continued to grow well above non-energy industrial goods,” he added.

Torres pointed out that, on the one hand, the rise of four tenths has been higher than the average of recent months and that of December 2023, when prices stabilized, and on the other hand, the increase in the core index stands out.

“The INE talks about fuel rises that may be temporary, although it also responds to the depreciation of the euro against the dollar, which is something that can continue.”

“Therefore with energy, we are not talking about the positive news that we have had until recently,” he concluded.