Inflation in Spain jumped in January after six months of slowing price growth, data released by the National Statistics Institute (INE) on Monday showed. Rising fuel prices were the culprit behind the higher reading.
Consumer prices soared by 5.8% from the same month a year ago, up from the previous month’s 5.5% increase, and well above the market consensus forecast of 4.9%.
The INE said the price increases came after the government ended its blanket subsidy on all fuels, while the prices of clothes and shoes did not fall as fast as during January 2022, the month when retailers typically begin offering discounts in Spain.
Core inflation, which strips out volatile fresh food and energy prices, continued to rise strongly, climbing to 7.5% in January, up from 7.0% the prior month, the INE data showed. This is seen as an indication that underlying price pressures in the economy are still very high.
“It is bad data,” Raymon Torres, the chief economist at the think tank Funcas, said, while also stating his view that the sharp rise in core inflation is also due to higher processed food prices.
The country’s EU harmonized 12-month inflation stood at 5.8%, up from 5.5% in December and above the 4.7% expectation from analysts.
The stubborn inflation in Spain has squeezed households and businesses, thus dampening economic growth.
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