Spring of Inflation: Spain’s Increased Prices and Continued Rise in Services

By Eleanor Harrison Mar27,2024
Inflation in Spain Reaches 3.2% in March Following Three-Year Return to 21% VAT

In March, inflation increased by 0.8% compared to February, the largest increase since February 2023. This was driven by a number of factors, including the restoration of the normal VAT rate on electricity and the rise in gasoline prices. Despite this, prices of goods and services in Spain were only half a point more expensive than the previous month.

The monthly price evolution shows a continuous rise since the beginning of the year, with an underlying inflation rate of 0.5% in March. However, provisional data released by the National Institute of Statistics suggests that this rate will be moderated to 3.3%, which is lower than expected by market consensus.

Services are driving prices up more than goods, and food products like olive oil are also experiencing significant price increases. Spain is now the third country in the EU where basic food products are becoming more expensive. The Ministry of Economy has attributed the slight increase in inflation to these factors, as well as continued rising fuel prices.

However, despite this continued rise in food prices, it was less than in March of last year. Funcas has warned of inflationary pressures in services and their potential impact on salaries and margins. Overall, these trends suggest a strengthening of inflationary pressures in the market.

By Eleanor Harrison

As a content writer at newseasoning.com, I infuse flavor into words, crafting compelling stories that captivate and inform our audience. With a keen eye for detail and a passion for creativity, I strive to create content that not only engages but also inspires. Whether I'm concocting a savory blog post or whipping up a spicy product description, I pour my heart and soul into every piece I write. Join me on this flavorful journey as we explore the tantalizing world of content creation together.

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