Inflation rises again in Spain as fuel prices surge to highest level this year

The government's INE statistics office has said the rise in inflation in August was explained by the increase in fuel prices compared with the falls recorded a year ago in August 2022

José María Camarero

Madrid

Friday, 1 September 2023, 16:50

Annual inflation in Spain was 2.6% in August according to government data This was the second consecutive monthly increase after July's 2.3% and following the low of 1.9% in June, which was the lowest figure for the whole of 2023 so far.

Prices in August rose by 0.5% compared to July. The government's INE statistics office has said the rise in inflation in August was explained by the increase in fuel prices compared with the falls recorded a year ago in August 2022. Fuel has gone up at the pump by 12% so far this year and is the highest it has been this year, just as many people drive home after their summer holidays. On the other hand, electricity has helped to contain inflation in August. Although the price of electricity has risen compared to recent months, if we compare it with August last year, the increase has been lower.

Despite the IPC - Spain's consumer price index - rising to 2.3% year-on-year in August, core inflation, which measures the daily cost of living without taking into account the most volatile products (electricity or unprocessed food) dropped a tenth of a percentage point, although it stands at 6.1%. This rate will be the reference for whether or not the tax reduction on basic foodstuffs, which the government has extended until 31 December, will be maintained. Ministers have stated that if this falls below 5.5% in September the rebate will not be applied as of 1 November.

Analysts had anticipated inflation would rise by a few tenths of a percentage point in August due to both the generalised increase in prices throughout the economy and the comparison effect with the figure for the same month last year. Bank of Spain's estimates point to the end of year inflation between 4% and 5%.

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