Spain Inflation

Inflation picks up in July from the prior month

Latest reading: Harmonized consumer prices increased 3.9% on a year-on-year basis in July, following a 3.6% increase in the prior month and coming in above market expectations. July's reading was the strongest since February 2023. Relative to the prior month's figures, there were higher price pressures for transportation (+6.4% in annual terms vs +5.3% in June) and housing and utilities (+5.7% vs +4.7% in June). This reflected higher fuel, gas and electricity prices amid tighter energy markets and the partial reversal of government subsidies. In contrast, there were reduced price pressures for food and non-alcoholic beverages (+1.6% vs +1.9% in June), restaurants and hotels (+5.1% vs +5.3% in June) and recreation (+1.9% vs +2.3% in June). Meanwhile, consumer prices were up 3.6% in July, following a 3.2% rise in the previous month. Lastly, harmonized consumer prices fell 0.02% in July in month-on-month terms, following a 0.61% increase in the prior month.

Panelist insight: On the next month’s inflation outlook, Camilo Ulloa, analyst at BBVA, commented: “Our real-time estimates point to a further acceleration in headline inflation in August, which could stand at between 4.1% and 4.3% year-on-year. The additional upward pressure comes mainly from the energy component, with the increase in fuel and lubricant prices standing out.”

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