The CPI (Consumer Price Index) moderated in October for the third consecutive month, to 7.3% compared to the same month last year, according to data confirmed this Tuesday by the INE (National Institute of Statistics). “Spain grows, creates jobs and reduces inflation”, they defend from the Government.
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If fuels gave a break in September, last month the falls in gas and electricity were the main responsible for the drop in the CPI, exactly 1.6 points. Mainly, due to the effect of the “Iberian mechanism”, according to the Executive, and as there was no more space to store more gas while the cold did not arrive. However, the indicator rose in the monthly rate due to the rebound in fuel prices.
The easing of the year-on-year CPI is also due to the government’s other shock measures to alleviate the damage from price increases. “Highlighting the reduction in transport prices or the lowering of taxes on gas and electricity bills,” emphasizes the Ministry of Economic Affairs itself. The slowdown in economic activity in general also has an influence, after the end of the first complete and unrestricted tourist season since 2019.
This moderation practically confirms that the inflation of 10.8% in July is the ceiling of this energy crisis that was exacerbated by the Russian invasion of Ukraine and that has affected all prices. It also places Spain as the second largest economy in the eurozone where the CPI has relaxed the most, which is only lower in France.
From now on, it will be more difficult for energy prices to continue being the ones that contribute the most to runaway the general CPI due to the base effect. At the end of last year they already staged strong increases, so the comparison in the coming years is made with respect to already very high levels.