In March, the INE released data showing that inflation rose to 3.2% compared to the same month in 2023. This was an increase of 0.8% from February, which was the largest monthly increase since February 2023. The interannual rate also increased by four tenths compared to February, mainly due to the rise in electricity prices following the VAT increase on electricity, fuel, and tourist packages.
Non-alcoholic foods and drinks saw their year-on-year progress moderate to 4.3%, one point less than in February, thanks to lower prices of legumes, vegetables, and other food products. Meat prices also had a smaller increase compared to the previous year. The Ministry of Economy noted that this reduction in food prices has led to an improvement in family purchasing power and increased competitiveness of Spanish companies.
Olive oil continued to have the highest inflation rate at 70% compared to the same month last year, followed by passenger transport by sea, national tourist packages, and fruit and vegetable juices. Products such as potatoes, fresh or chilled fruits, and chocolate also saw significant year-on-year increases.
The underlying inflation fell two tenths in March to 3.3%, which is one tenth higher than the general CPI rate but lower than it was in February due to seasonal factors such as Holy Week’s impact on accommodation services and restaurants. This decrease represents a positive sign for consumers as it means that prices are decreasing at a faster rate than expected. However, there is still concern about rising energy costs caused by the VAT raise on electricity and fuel.
In conclusion, while food prices are still high due to various factors such as transportation costs and supply chain issues, olive oil remains the most expensive item with a significant price increase over time followed by other products like national tourist packages and international tourist packages which were heavily impacted during Holy week celebrations.
