Spain: Harmonized inflation falls to lowest level since January in October

Harmonized inflation dropped to 7.3% in October, following September’s 9.0%. October's reading represented the weakest inflation rate since January. The moderation was broad-based, with reduced price pressures recorded for clothing and footwear, transportation, and housing and utilities.

The trend pointed up, with annual average harmonized inflation coming in at 8.3% in October (September: 8.2%). Meanwhile, consumer price inflation fell to 7.3% in October, from September’s 8.9%.

Lastly, harmonized consumer prices rose 0.05% in October over the previous month, contrasting the 0.25% decrease seen in September.

Commenting on the release, Wouter Thierie, economist at ING, stated:

“Cooling demand will continue to ease inflationary pressures as it will become more difficult for companies to pass on higher prices to the end customer. Although still historically high, the number of companies planning to raise prices further also shows a downward trend in a wide range of sectors. Price selling expectations only continue to edge higher in food and consumer goods. This shows that inflationary pressures will remain high in the coming months and only very gradually start to ease.”

FocusEconomics panelists expect harmonized inflation to average 7.0% in 2022, which is up 0.3 percentage points from the previous month’s projection. For 2023, panelists expect harmonized inflation to average 3.4%.