One year after the start of the war in Ukraine, the shock wave of the conflict continues to punish the Spanish economy. In February, inflation had a new upturn. Two tenths more that situate it at 6.1%. It is the second consecutive increase in the first two months of this year. First, there were two tenths in January and now two more in February, according to advance data from the INE published this morning.
For its part, core inflation, which does not take into account energy or fresh food, also rises. They are two tenths more, which places it at 7.7%, the highest since December 1986.
It is electricity and food that push prices up. The conclusion is that the drop in fuel prices, which rose in February 2022, and passenger transport have not offset the upward effect of electricity and food.
To be precise, electricity is up this month, compared to the decline in February 2022, and food is up more than in that month last year. In the opposite direction, fuel prices fell compared to February of last year.
If you look at the month-on-month rate, prices rose 1% between January of this year and February, which is the largest increase in the CPI in a month of February in 45 years, since 1978.
This Monday, the Prime Minister, Pedro Sánchez, already anticipated a "slight rise" in inflation, to later reduce it. “You have to see how inflation evolves in the coming months. We contemplate a slight rise, but then a drop in them over the next few months as a result of the fact that there has been a rise in the price of energy in recent weeks," Sánchez told Informativos Telecinco.
"Inflation rose slightly in February, probably in part due to the rise in electricity prices, which rebounded sharply after the drop in January. From there, we are going to see strong volatility in headline inflation over the next few months due to the effect of the fluctuations in energy prices that we experienced last year after the invasion of Ukraine," says Ángel Talavera, from Oxford Economics.
For her part, María Jesús Fernández, from Funcas, does not hide her surprise at the new rise. "He breaks our forecasts again. Both headline and core inflation continue to rise, when we expected a slight decline in both. It is especially worrying that core inflation has not begun to moderate," says Fernández.
Since the start of the war, one year and four days ago, when inflation, already high at that time, shot up to levels unknown in decades, until it reached its ceiling in July, with 10.8%, for from that moment moderate progressively but also slowly. In this way, it chained five consecutive months reducing until now at the beginning of 2023, two consecutive months have chained with a rebound in inflation.
Along the way, there has been an increase in food prices, which suffer year-on-year inflation of more than 15%, and although the impact of the VAT reduction on basic foods was noticeable in January, the effect was limited. Measured in month-on-month terms, that is, in relation to the previous month, in January the VAT reduction managed to reduce the price of the products to which it was applied. Together they fell by 1.4%. However, the shopping basket of food not affected by the reduction increased by 1.6%.
These are data from January that will have to be seen how they evolve in the coming months. Especially on March 14, when the CPI for February is known in detail.
In January, Spain had the second lowest inflation rate in the entire euro area, well below the big countries such as Italy, Germany and France, and also below the euro area average, which was 8.6%. The eurozone added three consecutive months in January moderating, although with great differences between the situation of the countries, ranging from 5.9% in Spain to that of Latvia and Hungary, above 20%.
