Fuels become 32% more expensive in one year and fresh products 23%, so that inflation in May is almost half a point lower than in April
In March inflation reached a record close to double digits (9.8%), the highest in four decades, but in April the situation eased slightly to 8.3%. A trend that was broken in May with a rise in the CPI rate to 8.7%, the INE confirmed on Friday. Inflation was four tenths higher in May than in April, the highest since 1986.
This deterioration is due to fuel and food prices rising again in May, causing inflation to continue to rise despite the lower electricity price. The INE points to the variation in core inflation (which does not take into account fresh food or energy products), as it rose by five tenths from April to May to 4.9%, the highest rate since October 1995.
From the Ministry of Economic Affairs, they respond that this recovery is below the maximum registered in March and that the measures in response to the consequences of the war (such as the fuel subsidy) “clearly limit the price increase”. For this reason, they maintain their forecast that inflation will gradually slow down in the second half of the year, albeit “without excluding fluctuations during the summer months” due to the high uncertainty emanating from the global economic context. But forecasts from some organizations such as the OECD are no longer so optimistic, predicting inflation to end the year at 8.1%.
That the shopping cart pulls the IPC is a bigger problem than when energy did. Core inflation is a more complicated rate to be lower than the general rate, which takes into account the price of fuel and electricity, which are more volatile over time. “It is a problem for the Spanish economy because it is a course that perpetuates itself over time,” explains the director of the Funcas Economic Situation, Raymond Torres. This entails a “loss of competitiveness for Spain” and highlights that this is the measure the ECB is trying to adjust its interest rates.
To get a sense of how things have changed, core inflation stood at 0.2% a year ago (headline CPI 2.7%). From June 2021, the increase started gradually, in September it reached 1% and just two months later it had already risen to 2.1%. Last February, when the war in Ukraine started and supply chain problems worsened, this percentage was already 3%, in April 4.4% and in May 4.9%.
Source: La Verdad
I’m Wayne Wickman, a professional journalist and author for Today Times Live. My specialty is covering global news and current events, offering readers a unique perspective on the world’s most pressing issues. I’m passionate about storytelling and helping people stay informed on the goings-on of our planet.
