The rate of inflation dropped significantly in Spain during October and is currently at 7.3%. This is down by 1.6% compared with September, which also registered a 1.6% drop in relation to August, and has dropped for three months running.
The October rate is mainly due to a reduction in electricity prices, but gas is also now cheaper than it was at the same time last year. Another, although a less influential factor, is that many shoppers have not yet begun to buy new winter clothing because the weather has been so warm across the country.
This new rate is a preliminary figure which will have to be confirmed by the National Institute of Statistics (INE) in mid-November, but it does show that prices have not risen as much as they did in the summer.
However, inflationary problems do persist as the core inflation rate (which does not include non-processed food or energy products) is still at 6.2%.
One of the biggest drops since Spain adopted the euro:
Sources at the Ministry of Economy have said that this drop of 1.6% in the inflation rate in October, is one of the biggest monthly reductions since Spain adopted the euro in 2002 and that since the peak rate in July (10.8%) government measures have reduced inflation by 32%.
These measures include the ‘Iberian Exception’, which is a cap on the price of gas used to generate electricity, a reduction in the IVA (VAT) on gas and electricity to 5%, the 20 cent discount on a litre of petrol and diesel, the 2% cap on property rent increases, and the lowering of public transport costs.
Some of these support mechanisms for the ‘cost of living crisis’ are due to finish at the end of the year, but it is hoped that an announcement will be made to extend them into 2023 to prevent a rebound in prices.
