2023-08-30 09:24:45
August has been a little more expensive for the Spanish economy in an already complicated context as it has been dragging record price increases over the last year. The interannual rate of inflation closed this month at 2.6%, according to advanced data from the INE, which represents the second consecutive monthly increase after it stood at 2.3% in July and after the minimum of 1 .9% in June, the lowest data in all of 2023.
The prices have increased in the month par excellence of the holidays. They have done so by 0.5% compared to July. And if there is a sample of that reality, that is the one that is lived in the service stations. The INE points out that the rise in inflation in August is explained by the rise in fuel prices and, to a lesser extent, liquid fuels, compared to the decreases registered in August 2022.
Little by little, filling up the tank has become more and more expensive since the beginning of the summer. In fact, August ends with the price of gasoline at 1.73 euros per liter, and that of diesel at 1.62 euros. They are not the highs of last summer, when they exceeded two euros per liter, but they have experienced a growing rise since June.
On the other hand, electricity has contributed to contain inflation in August. Although the price of electricity has risen with respect to the last few months, when compared to that of August of last year, the growth has been less. Then, in the midst of the energy crisis, the pool reached more than 200 and 300 euros per MWh, compared to just over 100 euros in recent weeks.
In addition, underlying inflation, which measures the daily persistent cost of living without taking into account the most volatile products (electricity or unprocessed food) has given a little respite by dropping one tenth, although it is still at 6.1 %. Now, this record is the one that worries the most because it shows how the prices of the domestic and business economy have been impregnated by the initial rises that electricity or fuel had at the time, motivated by the war in Ukraine, without being able to contain perennially.
That is the main reason -that of the evolution of subjacent inflation- why the European Central Bank (ECB) insists on the need to continue acting with interest rates to stop price rises. The monetary institution has already anticipated that there will foreseeably be a new rise in rates, although it is not clear whether it will authorize it at its imminent meeting in September or it will already do so at another meeting before the end of the year.
For the Ministry of Economy, these inflation data reflect that “economic policy measures make Spain have one of the highest levels of economic growth with lower levels of inflation” in the EU. The department headed by Nadia Calviño points out that Spain is consolidating as one of the euro zone countries with the lowest inflation, which has fallen by almost eight percentage points in the last year.
Analysts were already anticipating that inflation would rise a few tenths in August both due to the general increase in prices throughout the economy and due to the comparison effect with the data for the same month last year. Twelve months ago, inflation was 10.5%, after setting a record in the summer of 2022. And it was already beginning to moderate, which causes the ‘step effect’ whereby as soon as prices rise this year, the rate comparison with the previous one will continue to rise. It will do so foreseeably in the coming months as inflation at the end of this year compares with the falls registered in the last stretch of 2022. The Bank of Spain estimates point to an end of the year with an average inflation rate of between 4% and 5%.
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