7th December 2023
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Spain to raise inflation forecast after prices continue to climb

The Spanish government is to raise its inflation forecast after annual inflation hit a 37-year high in the period to June, Economy Minister Nadia Calviño said on Thursday.

Spain’s consumer price inflation accelerated as initially estimated in June to reach its highest level since April 1985, latest figures from the National Statistics Institute (INE) revealed on Wednesday.

Consumer price inflation climbed to 10.2% in June from 8.7% in May. That was in line with flash data published on 29 June.

The Spanish inflation rate will remain at the current levels of about 10% before starting to fall at the end of summer, Calviño said in an interview with radio station RNE.

‘Forecasts are to continue with a high inflation, very high, and our goal is to get the inflation near the average of the European Union,’ she said, adding the government will take more measures to cushion the negative impact on consumers. ALSO READ: Many train journeys in Spain will be free from September until end of year.

Spanish inflation has accelerated in the past few months, driven by rising energy and food prices. The Spanish government is due to update its official forecasts for most indicators, including inflation and economic growth, in September. The current inflation forecast for the whole of 2022 stands at 6.1%.

Statistics from the INE this week showed that the underlying inflation, which excludes non-processed food and energy products, also rose to 5.5% in June from 4.9% in May, as estimated. This was the highest rate of increase since August 1993.

Transport costs alone surged 19.2% annually in June due to higher prices of fuel.

Prices for food and non-alcoholic beverages grew 12.9%, which was the biggest yearly increase since the series began in January 1994. Housing costs also registered a double-digit growth of 19%.

On a monthly basis, consumer prices grew at a faster pace of 1.9% in June, after a 0.8% gain in the preceding month. The figure for June was revised up from 1.8%.

EU harmonised inflation rose to 10% in June from 8.5% in May, as estimated.

ALSO READ: Spain to hit banks and energy firms with temporary windfall tax.

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