2024-12-13 09:30:00
ANDThis evolution of inflation (increase in prices compared to the same period of the previous year) is mainly due to the increase in electricity and fuel prices, which had decreased in November 2023.
As for the underlying inflation rate (excluding energy and fresh food products,traditionally the most volatile in the shopping basket),it was also 2.4% in November, a tenth less than in October.
According to INE data, inflation in Spain increased in November for the second consecutive month.
Spain abolished zero VAT on some foods at the end of September and hopes to restore this tax to all normal values by the end of 2024, thus ending almost three years of unusual measures to control inflation.
The Spanish government took measures to respond to rising prices after the first half of 2022 recorded some of the highest values in the European Union (EU) and in July of the same year recorded the highest inflation in the country since 1984 (10.77%).
2022 ended with the lowest inflation in the EU (5.7%) and last year the rate continued to fall, despite some fluctuations, reaching 3.1% in December.
During 2022 alone, Spain has approved several packages of measures to respond to inflation above 3% of gross domestic product (GDP), worth around 45,000 million euros, including direct aid to consumers and businesses and tax benefits, such as a reduction in VAT on electricity and gas or a discount on the purchase of fuel.
According to the most recent official data, the inflation rate in the countries of the single European currency (euro zone) was 2% in October, while in the 27 countries of the Union as a whole it was 2.3%.
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How can Spanish consumers protect themselves from the effects of rising inflation?
Interview with dr.Elena Martínez, Economic Expert on Spain’s Inflation Trends
Time.news Editor: Welcome, Dr. Martínez. Thank you for joining us today to discuss the recent rise in inflation in Spain. To start, what are the main drivers behind the increase in inflation we’ve seen in November 2023?
Dr. Elena Martínez: Thank you for having me. The recent uptick in inflation can primarily be attributed to rising electricity and fuel prices. These increases follow a period of decrease in November 2023, making them particularly impactful in calculating year-over-year inflation.
Time.news Editor: It’s fascinating to note that the underlying inflation rate, which excludes energy and fresh food, remained at 2.4% in November. Is ther a reason this slower rate is significant for consumers?
Dr. Elena Martínez: Absolutely. The underlying inflation figure is crucial because it provides a clearer picture of the general price trend,removing the volatility from energy and fresh food prices that can skew perceptions. A rate of 2.4% suggests that prices are stabilizing to some extent, which is a positive signal for consumers.
Time.news Editor: The Spanish goverment has just lifted the zero VAT on certain food items.What implications does this decision hold for inflation moving forward?
Dr. Elena Martínez: The abolition of zero VAT on some food items,effective from the end of September,is a significant policy shift. The government’s goal to restore VAT to normal levels by the end of 2024 indicates a return to pre-crisis tax measures. This could result in higher prices for consumers in the food sector, potentially exacerbating inflationary pressures unless counterbalanced by other factors.
Time.news Editor: Spain experienced a notable inflation peak of 10.77% back in July 2022. Could you share how this has influenced current policy measures?
Dr. Elena martínez: indeed, the inflation peak in mid-2022 prompted the government to implement a series of emergency measures, worth approximately €45 billion. These included direct aid to households and businesses, VAT reductions on essential utilities, and fuel discounts. although inflation ended 2022 at a comparatively low rate of 5.7%, these measures underscored the need for adaptive economic policies in response to fluctuating inflation rates.
Time.news Editor: With spain’s inflation rate at 2.4%, how does this compare to broader EU statistics, and what does this mean for Spain’s economic outlook?
Dr. Elena Martínez: As of October, the eurozone inflation rate was at 2%, and 2.3% across the entire EU. Spain’s position is slightly above the eurozone average, which suggests a unique set of local economic challenges.However,the downward trend in inflation over the last year indicates that Spain is stabilizing,yet careful monitoring and continued fiscal support will be necessary to ensure that inflation does not escalate again.
Time.news Editor: For our readers concerned about how these trends might affect their daily lives and financial planning, what practical advice would you offer?
Dr. Elena Martínez: Consumers should keep an eye on price trends and consider adjusting their spending habits based on essential goods.It’s advisable to budget for potential increases, particularly in food and energy, and to explore government resources that may offer relief. Staying informed on policy changes and their implications can also help consumers make strategic financial decisions in the coming months.
Time.news Editor: Thank you, Dr. Martínez,for your insights on Spain’s inflation situation. Your expertise is invaluable as we navigate these changes in the economic landscape.
Dr. Elena Martínez: My pleasure! Thank you for the chance to discuss these important issues.