Inflation at lowest level for 18 months
But food prices continued to rise, despite huge fall in energy costs
INFLATION in Spain fell to 3.3% in March, which was 2.7% lower than February and the best figure registered since August, 2021.
The reduction was largely due to the fall in the price of electricity, down 51.8% on the same month last year; and cheaper fuel.
However, food prices in the supermarkets continued to rise – up a whopping 16.5% on average last month, according to data from the national statistics institute (INE).
Minister for social security, José Luis Escrivá admitted the overall figure was a ‘positive surprise’ and ‘undoubtedly very good’ news.
News agency Europa Press noted that the data had been slightly skewed by the fact that the Russian invasion of Ukraine in March last year had sent energy and fuel prices through the roof, causing inflation to leap in that month.
As such, any comparison with 2022 was liable to be favourable – although, according to Sr Escrivá – the government had not been expecting such a good result.
Even so, he noted that the measures they have taken – particularly over electricity prices – have proved to be effective and meant that Spain was leading the way in Europe.
The food discrepancy
Despite the huge reduction in electricity prices and drops in fuel costs, the food production chain has not yet passed on these decreases in their overheads
to consumers.
Speaking on national radio on Monday, deputy prime minister Nadia Calviño recognised that there was a ‘resistance’ to the reduction in the price of food.
However, this was not just in Spain but a ‘generalised problem’ around Europe.
“This ‘resistance’ is our primary worry at the moment because it affects the quality of life of the population,” she said.
At the moment, the government is not considering new measures, she said, even though their junior partner in the ruling coalition, Unidas Podemos, has called for price caps to be enforced on basic food products.
Sra Calviño added that the recent announcements by some supermarket chains such as Mercadona over the reduction of some of their prices was a ‘positive’ move.
She also called for the plunge in energy costs for food producers to be ‘passed on to the consumer as quickly as possible’.
According to the INE, price rises were highest in vegetables, but slowed down for seafood, milk, cheese and eggs when compared with March last year.
National broadcaster RTVE found that vegetables had gone up by 5.7% from February to March and a massive 17.7% so far this year – and 27.8% since March, 2022.