Saturday, September 30, 2023

CPI rose to 2.6% in August due to gasoline and oil

Condemned by inflation: drought makes food more expensive and there has been a recent rate hike

The CPI rose in August for the second month in a row: it reached 2.6% due to fuel

Data from the National Institute of Statistics (INE) confirmed this Tuesday that inflation in Spain is here to stay for a long time, and the price of the product fuels, energy and staple foods will not decrease, and they condemned the pockets of citizens to another hot autumn. In fact, the Consumer Price Index (CPI) increased by 0.5% in August compared to the previous month and raised the interannual rate, up to 2.6%, mainly due to the increase in fuel prices and lubricants for personal vehicles and liquid fuel.

Even he food prices moderated its growth by three tenths, to 10.5%, it continues at a very high level, especially considering that many products have a temporary VAT reduction and some have this tax abolished, until at the end of 2023. However, despite this lower VAT applied to the basic shopping basket, food is 10.5% more expensive than a year ago.

The prices of milk, cheese and eggs stabilized at their high level, compared to the biggest increase they experienced last year, while Meat, bread and cereals became more expensive, although somewhat less in August this year than they did in the same month in 2022. On the contrary, the olive oil caused the increase in inflation, which experienced a monthly increase of 8.7%, which means that one liter is 52% more expensive than last year.

CPI: two consecutive months of increase

As the INE statistics show, with the progress of August, total inflation chain two consecutive months of increase, after it rose four tenths in July, to 2.3%. Faced with the increase in fuel prices, Statistics highlights that the prices of electricity and accommodation services will be less in August of this year than in the same month of 2022.

Another worrying fact is that of Underlying inflation (without unprocessed foods or energy products), which although it falls on the tenth of August, until 6.1%, is 3.5 points above the general CPI, which shows that the inflationary tension has reached core in the Spanish economy.

For the First Vice President and Acting Minister of Economic Affairs, Nadia Calvino, The final CPI data for August confirmed that inflation remained below 3% and food inflation moderated. “Spain has consolidated itself as the European economy with the highest growth and the lowest inflation, which benefits the competitiveness of our companies and also the purchasing power of wages.

In Calviño’s opinion, the economic policy measures applied in Spain are permissible cut inflation by eight points last year or “in an inflationary context across Europe.”

The shopping basket became more expensive compared to July

Measured in monthly terms (August to July), the CPI registered an increase of 0.5%, three tenths more than what it increased in the previous month. With this rebound, the monthly inflation chained three consecutive increases.

According to INE, the monthly increase in the CPI in August was the result of an increase in the price of fuel, tourist packages and restaurants, all in the heat of the tourist season.

The prices of products also increased during the month. food, 0.2%, due to the increase in the price of oils and fats, legumes and vegetables and, to a lesser extent, fish and seafood and meat.

For its part, in the eighth month of 2023, the Harmonized Consumer Price Index (IPCA) put its interannual rate at 2.4%, three tenths above the rate registered in the previous month. For its part, the monthly change in the IPCA is 0.5%.

Half of the foods with reduced VAT increased

The elimination and reduction of VAT on basic foods does not work as it should, and almost half of the products, 48.4%, have already increased their price compared to what they had at the beginning of the year, when the rule was implemented. That’s why FACUA-Consumers in Action complaint, in a study carried out in August, in which it monitored the evolution of almost a thousand foods affected by the reduction of VAT in eight major distribution chains.

It should be noted that, according to article 72 of the Royal Decree-Law 20/2022, on December 27, “the reduction in the tax rate will fully benefit the consumer, without, therefore, the amount of the reduction that can be allocated. bug -os or partially to increase the profit margin of the business with the consequent increase in the prices of the chain of production, distribution or consumption of products”. This means that none of these products can go up, unless there is an increase in costs.

However, according to FACUA, the percentage of prices in which they found a progressive increase from January. Therefore, while in the first month of the year only an increase of 6.7% of products was noted, in February they were 17.4%, in March 30.8%, in April 42.0%, in May 43.8%, in June 44.7%, in July 47.0% and in August 48.4%.

Nation World News Desk
Nation World News Desk
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