Inflation dropped slightly in August in Spain but by less than expected

As forecast, the spiraling inflation appears to have reached a peak and the CPI for August brought a little relief for consumers. Figures released yesterday (Tuesday) by the INE (National Institute of Statistics) show that inflation last month was 10.5%.

This is three-tenths of a percentage point lower than in July, when it was the highest since September 1984 at 10.8%, and marks the end of three consecutive months of an increase in the year-on-year rate. However, it was one-tenth of a point higher than anticipated by the INE a few weeks ago and it is still in double digits.

August was also the third consecutive month with inflation in two digits, while the core inflation rate (which does not include unprocessed foods and energy products) rose by three-tenths of a point to 6.4% last month, the highest since January 1993.

Basic food items:
In general terms, it appears the reduction in fuel prices in recent weeks is behind the moderation of the year-on-year CPI rate, but in the meantime, the cost of electricity and food is still going up, especially basic items such as meat, bread, cereals, milk, cheese, and eggs.

In comparison with the prices in August last year, fuel has gone up by nearly 25% (although it went down by 7% last month), and energy products are up by 37.4%.

However, the most alarming situation is that of food, with the price of products such as milk having risen by nearly 26% in the past year, and vegetable oil by 24%. Cereals have gone up by 21% and bread and beef by over 15%, eggs by 22.4%, and potatoes, pulses, and fresh vegetables are also 15% more expensive than they had been a year previously.

And if we look at how much these products have risen in price in the past month, the figures also call for restraint when buying. Milk went up by 2.5% between July and August, and cereals by 1.4%.