Spain is the first major economy in the eurozone with inflation falling below 2%. And it continues its irregular downward trend, El País reports. The Consumer Price Index (CPI) moderated to 1.9% in June compared to the same month last year. The rate, published by the National Institute of Statistics (INE), is the lowest since April 2021, but it comes with two cautions: the recent improvement in inflation is mainly due to the base effect. As prices were soaring during the same period last year, the year-on-year comparison appears more benign at first glance. Additionally, the underlying inflation, which excludes fresh food and energy, remains high: although it moderated from the previous month, it stood at 5.9%.
The June CPI, which is an advanced figure that will need to be confirmed, was more than one percentage point lower than May, which recorded a year-on-year price variation of 3.2%. On a monthly basis, prices rose by 0.6% compared to May. The INE indicates that this evolution is mainly because this month the price increases in fuels, electricity, food and non-alcoholic beverages have been lower than in June of the previous year. The Ministry of Economic Affairs states that the data “confirms the effectiveness of the main tax reduction measures and bonuses.” The government extended some of these measures, such as the elimination or reduction of VAT on certain staple foods, the fuel price discount for professionals, and the cap on the price of butane gas cylinders.
The June CPI, which is an advanced figure that will need to be confirmed, was more than one percentage point lower than May, which recorded a year-on-year price variation of 3.2%. On a monthly basis, prices rose by 0.6% compared to May. The INE indicates that this evolution is mainly because this month the price increases in fuels, electricity, food and non-alcoholic beverages have been lower than in June of the previous year. The Ministry of Economic Affairs states that the data “confirms the effectiveness of the main tax reduction measures and bonuses.” The government extended some of these measures, such as the elimination or reduction of VAT on certain staple foods, the fuel price discount for professionals, and the cap on the price of butane gas cylinders.