Inflation rose four tenths to 2.3% in July, largely due to higher prices for fuel and travel packages compared to the same month in 2022. And with food rising 10.8%, half a point more than in June, after five months in which price increases in supermarkets, fruit shops and fishmongers had moderated.
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The INE (National Statistics Institute) confirmed this Friday the acceleration of the general CPI (Consumer Price Index) after the decline to 1.9% in June, and also of the underlying CPI (the calculation of which excludes precisely prices). Energy) from 5.9% to 6.2%.
More specifically, the statistics attribute the increase in the general CPI to the increase in the prices of fuels and lubricants for private vehicles, in addition to the increase in the cost of clothing and shoes, to the increase in travel packages mentioned above and to the increase in food and non-alcoholic items Beverages. , which account for a large share of families’ total expenses.
In these last prices, those of the shopping basket, the INE has highlighted that the prices of fruits and oils and fats increased in July of this year, compared to the decrease in the same month of 2022.
The base effect that favored the weakening of inflation in the first half of 2023 will no longer be as noticeable in the coming months. That is, from January to June, prices began to rise very sharply in the same months of the previous year. From now on it will no longer be this way for some products and services.
Prices have barely increased compared to June
On a monthly basis, the overall consumer price index rose 0.2% in July compared to June, while the underlying consumer price index remained flat. This means that the price indices have hardly changed from one month to the next.
In addition, “Spain remains one of the countries with the lowest inflation in the euro zone,” said the Ministry of Economy after learning the preliminary data for July. “In the second month, inflation remains at around 2%, which favors the competitiveness of Spanish companies and the gain in purchasing power of salaries,” he stressed.
“The effectiveness of the measures taken has made it possible to reduce inflation by 8.5 points last year, from the peak in July 2022,” concluded the ministry, led by Economic Vice President Nadia Calviño.
The blow against consumption
The latest data suggests that household consumption continues precisely due to the weakening of inflation, but also due to the strength of the labor market and despite the interest rate increases by the European Central Bank (ECB) and their reflection in the increase in the cost of mortgages and Loans in general.
At the end of July, the president of the monetary institution, Christine Lagarde, admitted this Thursday to Spain, after raising the price of money by another 0.25 points to 4.25%, that the situation in our country is different than in the rest of the world. the euro zone, but “the monetary policy is the same,” he said.
The big difference in our country compared to Germany, Italy or France is precisely the faster easing of price increases thanks to measures such as the tank cap (or the Iberian exception).
This weakening of inflation and the strength of the labor market not only mitigates the loss of purchasing power of families, but also increases the competitiveness of the tourism sector and export companies, which also face lower costs due to lower salaries.