Thursday, October 28, 2021

Spain’s inflation rises to 13-year high as energy costs rise

Inflation levels in Spain hit a 13-year high in September, driven by a rise in energy costs, data from the National Institute of Statistics (INE) showed on Wednesday, according to data from the National Statistics Institute (INE).

The flash indicator produced by INE (PDF) showed that national consumer prices rose 4.0 percent year-on-year, the highest reading since September 2008, when the rate was 4.5 percent.

The increased inflation levels are mainly attributed to rising electricity prices, although tourist package prices are falling more in 2020 than this year, and fuel and oil costs for private vehicles are also rising. Yes, according to INE.

Spain is one of several European countries facing rising energy bills as gas prices rose more than 35 percent last month amid short supply and demand growth as the pandemic hit economies around the world. , leading to fears that there simply isn’t enough gas stored for winter if temperatures are particularly cold in the Northern Hemisphere.

In Europe, supply levels are 16 percent below the five-year average, a record low for this time of year.

Spain’s government confirmed on 14 September that it would introduce a series of short-term temporary “shock measures” in an effort to cut spiraling energy bills.

The state gazette said the measures are aimed at “immediately halting the impact of the electricity price on other sectors of the economy”.

Such measures include limiting the profits that hydroelectric and other renewable power generators can earn from rising electricity prices, and redirecting billions of euros to consumers.

The government said it expected about 2.6 billion euros ($3.07 billion) from companies to consumers over the next six months and that the measure would remain in place until the end of March, when natural gas prices are expected to stabilize.

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The country will also use an additional 900 million euros it hopes to raise from sales this year to reduce bills through the auction of carbon emissions permits, which will also be allocated to reduce consumer bills. The government cited higher market prices as the reason for the additional funds.

Spain will also limit regulated price hikes for natural gas in the third quarter to 4.4 percent, versus forecasts for growth of 28 percent.

Elsewhere, data from INE showed that Spain’s annual rate of the Harmonized Index of Consumer Prices rose 4.0 percent in September, up from 3.3 percent in August, marking a 13-year record.

The latest INE report comes as the OECD said it expects consumer prices in major economies, including the United States, to rise faster than previously expected before settling above pre-pandemic levels.

The Paris-based organization said in its September Economic Outlook (PDF) that the headline rate of consumer price inflation is projected to average 3.7 percent in 2021 across a group of 20 major economies, before rising to 3.9 percent in 2022.

Tom Ozimek and Reuters contributed to this report.

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Katabella Roberts is a reporter currently based in Turkey. She covers news and business for The Epoch Times, focusing primarily on the United States.

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This News Originally From – The Epoch Times

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