Inflation rose three tenths in August to stand at 2.6%, according to advance data published this morning by the INE. It is gasoline that has pushed prices up, especially when compared to August of last year when prices fell. On the other hand, electricity acts in the opposite direction, which has risen, but less than in August 2022.
There are two consecutive months of price increases, although the truth is that they follow the planned script. After reaching their lowest level in June, with only 1.9%, they have rebounded slightly in July and also in August. Looking to the near future, it is expected to continue a gradual upward trend until the end of the year, although remaining at moderate levels, nothing to do with 2022.
The base effect plays a decisive role in this evolution, the comparison with the same months of the previous year, in which the war in Ukraine and its economic derivatives led to runaway inflation in the first half, which began to moderate gradually in the second.
For its part, underlying inflation, which does not take into account energy and fresh food, is entrenched. It drops one tenth and remains at 6.1%. The underlying has been above or around 6% all year, which is a worrying element because it is the data that facilitates the more fundamental trend in prices.
From the Ministry of Economy they emphasize that with these data, Spain consolidates itself as one of the countries in the euro zone with the lowest inflation, after lowering it by nearly 8 points in the last year. "This favors the competitiveness of Spanish companies, the gain in market share and the increase in the purchasing power of salaries", they add in Economy
If at the macroeconomic level, Spain seems to have inflation well under control, at the micro level, there are elements that harm families, and especially the most critically vulnerable. This is especially the case with food prices which, along with other expenses, eat up the income of households, which spend more than they earn. The price of food in July rose to 10.8% year-on-year (in August the CPI data does not yet provide this disaggregated information). In this area, the drought has been an additional element that, by reducing demand, has aggravated already very high prices that are finding it difficult to moderate.
