Inflation accelerated to 9.8% in March, an annual record since 1985.

Inflation in Spain rose 9.8% in March from the same month last year, according to data released by the National Institute of Statistics (INE) this Wednesday. This is a record in the Consumer Price Index (CPI) since 1985, after a 7.6% increase in February, also compared to the same period last year. The IPC has been above 5% for 6 months now.

The unusual rate of inflation in March responds to the unrest caused by Russia when it invaded Ukraine in international markets, which started under stress in late 2021 because of this serious threat, until it literally condemned the country to the CPI of the last war. Weeks.

“73% of this increase is due to the impact of the Ukrainian invasion on energy and raw food prices,” said sources in the Ministry of Economy, headed by First Vice President Nadia Calvino. “That’s why we urgently need to use the National Response Plan adopted this Tuesday, which will reverse this upward trend, halt spending growth for companies and households, and start reducing inflation to a more moderate level in the short term. “, They continue.

Inflation reflects rising prices for electricity, gas, fuel, industrial raw materials such as aluminum or steel, and grain, in which Russia and Ukraine are leading players around the world. And this March, supply problems were added due to road traffic disruptions, which was justified precisely by the increase in costs that affected staple foods such as milk, oil or flour.

In the monthly variation, compared to February of the current year, inflation increased the rate to 3 points. The maximum in this case has been set since 1977, in the wake of the oil crisis.

And if the core CPI, which measures price evolution by extracting the most volatile products from the shopping cart, such as electricity and food, was recorded, it accelerated by 3.4% in March, compared to the same month in 2021, which is a record since 2008. After another 3% acceleration in February.

“Energy prices are completely out of control,” said Angel Talavera, chief economist at Oxford Economics in Europe. Will be announced sooner rather than later. ”

Inflation has been rising since last spring, due to global trade disruptions, global supply difficulties, reactivation and demand explosion after the pandemic, overcoming periodic restrictions due to health reasons. The last major one, Shanghai, the financial capital of China, was restricted this week.

Although the annual index for February 2021 was slightly negative – compared to 2020, in March of last year it advanced by 1.2%, which aggravates the acceleration of this month of March 2022.

Inflation puts its losses on the poorest

Inflation is raging for the poorest families. According to various studies conducted by Eurostat, for the eurozone as a whole, the lowest income is the one who spends the most money on basic goods and services in relation to their total costs, which is most emphasized.

In particular, according to the debt rating agency Moody’s, one-fifth of European households with the lowest incomes spend 15% on food and 7% on electricity and gas supplies and various fuels. Meanwhile, the highest revenue spends only 11% and 4% of their total costs on the same products.

“These products have a very strict demand, which makes it difficult to find a substitute (you can stop the vacation if it is very expensive, but it is more difficult to limit heating, for example, during the winter months), so inflation increases. “It has an unequal impact on revenue brackets,” said Rita Sanchez Soliva, an economist at Caixabank Research, in a recent report.

“The perverse effect of inflation on the lowest incomes is disastrous because they spend most of their wages or incomes on commodities,” agrees Professor Josep Bertrand, who adds that “the higher the inflation, the higher it is.” VAT is paid, because the same interest is paid at a higher price. ”

Moody’s team of analysts in a historical analysis shows that “when oil prices rise, consumer spending on food is more sustainable than other costs.” In short, following the example of Rita Sanchez, it is easy to postpone a decision to use a cruise in an inflationary context, but one cannot do without buying bread.