Thursday, February 2, 2023

How will the shield of January 2023 affect your pocket

Spaniards have started 2023 with 800 euros less in their pockets and Christmas spending that exceeds 600 euros per household on average. With which the slope of January will be harsher than usual for many families.

Inflation began to ease in August, but for months the main indicator—which represents the bulk of the shopping basket—remained under pressure on prices. Food is becoming more expensive than ever, while the items that increased the most in the basket last year have slowed their climb for months.

beyond prices —and the challenge of New Year’s financial resolutions—, they come in handy in January 2023, too New taxes and laws that will affect the wealth of Spaniards and the financial status of self-employed workers.

This is how the January slop in 2023 will affect your pocketAfter one of the most expensive Christmases of your life.

shopping basket

The rise in prices, especially of food, is such that it has prompted the government to include it in a new anti-crisis decree. VAT reduction on food, Bread, bread flour, milk, cheese, eggs, fruit, vegetables, legumes, potatoes and cereals will pass Super-low VAT from 4% to 0%, Oil and paste from 10% to 5%.

The VAT deduction will be immediately transferred to the price of the meal and will Applicable during the first 6 months of the year,

Food cost is what is exerting the most pressure on inflation right now, especially on core inflation (as you can see in the graph above). this indicator represents a structural rise, so it’s more difficult to go down,

In other words, support will give you a boost on the January slope, but it won’t be reflected in the same immediate way as how much price is moving up. Inflation will remain above the 2% target until 2025.

electricity bill

With the cost of power generation falling and fuel costs down, the energy crisis is putting a halt to inflation. And VAT on electricity will remain at 5% from the normal 10% for at least the next 6 months.

What will happen in 2023? you really don’t know for now, Prices will continue to rise in the coming monthsBut less than expected. It is estimated that in 2023 the megawatt hour (MWh) will exceed 200 euros. In December it has not exceeded 150 Euro/MW.

mobile and internet bill

Vodafone and Telefónica have announced an increase in rates for their internet services and mobile phone lines. Orange has left the door open.

Source: Cnmc |  Author: Marta Garrijo (By Spain).

Convergence packages are getting more expensive every day, but the prices in the lower segment are adjusting with the entry of new players and other brands. In fact, Digi and Massamobile led the Spanish market in customer acquisition in August. This is how families pay for internet and the war of the telephones has evolved Less cost,

combustible

The 20 cents per liter rebate on petrol and diesel, except for transporters and fishermen, is expiring on December 31. So that, From January 1, it will cost you more to refuel your vehicle,

So far this year, petrol prices have increased by 14 per cent and diesel by 31 per cent. But Spain is the second country (out of 4 analyzed) in which gasoline prices have declined the most since June. And although it is one in which diesel has become more expensive from December to December, it still costs less than in France, Germany and Italy.

transportation

Cercanías, Rodalies and Media Distancia tickets will also be free in 2023. 30% in urban and inter-urban public transport Autonomous and municipal governments have up to 50% consideration.

As you can see in the graph above, since the implementation of these measures in September 2022, transport prices have offset the increase in fuel. It will be no different in 2023. Although other modes of transport, such as taxis, may change the trend.

rent

Did it seem to you that rental flats were more expensive than ever? Well, as consulted by experts Business Insider SpainIn 2023, the consequences of the price crisis will start being felt in rental costs.

Concentration of demand in major capitals will continue to push the prices above the maximum. Rooms may become more expensive in 2023 by between 5% and 10%.

mortgage

Home sales will fall 11% in 2023, but could become up to 3% more expensive in some cities. The price, in turn, would be linked to an increase in the cost of mortgages due to an increase in interest rates.

In just one year, Euribor has gone from -0.5% in December 2021 to 2.8% in November 2022. For those who have variable-rate mortgages, this means between 1,900 and 4,700 euros more per year.

Repairs

The prices at restaurants and hotels have gone up, as have shopping carts. Since inflation began to subside, they have continued to grow at the same rate—despite declining energy prices.

However, restaurants will continue to feel the pressure from food prices. And hotels have already assumed that their prices in Spain will increase by an average of 7% in 2023.

taxes

This January 1, a new tax comes into force to distribute the cost of pensions among different generations of workers. This is the Intergenerational Equity Mechanism (MEI) for pensions. This will affect all employees with an additional contribution of 0.6% – 0.5% matched by employers and 0.1% by workers.

The tax on large fortunes will also be implemented on a temporary basis. In this case only 0.1% taxpayers (23,000) will be affected.

Finally, personal income tax will be increased by one point for capital gains between 200,000 euros and 300,000 euros, and another point for those over 300,000 euros.

autonomous

In 2023, self-employed workers will begin contributing based on their actual income. The new self-employed quota will come into effect as early as 2023. The sections will be as follows:

performance installments quota 2023 quota 2024 quota 2025
≤670€ 230 225 200
>670-900€ 260 250 220
>900-1.125,9€ 275 267 260
>1.125,9-1.300€ 291 291 290
>1.300-1.500€ 294 294 294
>1.500-1.700€ 294 294 294
>1.700-1.850€ 310 320 350
>1.850-2.300€ 315 325 370
>2.030-2.330€ 320 330 390
>2.330-2.760€ 330 340 415
>2.760-3.190€ 350 360 440
>3.190-3.620€ 370 380 465
>3.620-4.050€ 390 400 490
>4.050-6.000€ 420 445 530
>6.000€ 500 530 590

A break for the pockets most affected by January’s costs: a check for 200 euros

Among the measures of the new anti-crisis decree, the government has included a monthly aid of 200 euros, which can be formalized electronically on the website of the tax agency between February 15 and March 31, 2023.

Those whose income is less than 27,000 euros per year, whose assets do not exceed 75,000 euros and who are not recipients of a minimum vital income or pension paid by the general regime and the special regime of social security or the regime of the inactive classes. State, and his habitual residence in Spain on 31 December.

Nation World News Desk
Nation World News Deskhttps://nationworldnews.com
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