Inflation in Spain back to single digits

Posted on October 14, 2022Comments Off on Inflation in Spain back to single digits

Belgium, (Brussels Morning Newspaper) Latest data from the Spanish National Statistics Institute (INE) shows that annual inflation stood at 8.9% in September.

The rate dropped from 10.5% in the period up to August and is slightly lower than the 9-percent flash estimate from earlier this month, according to Reuters reporting on Friday.

INE pointed out that, while lower than in previous months, inflation remained high as price of electricity continued to soar. It added that growth of food prices of 14.4% in September, the steepest since 1994, contributed to high inflation.

The body added that core inflation, which excludes energy and food prices, dropped from 6.4% in August to 6.2% in September.

The Bank of Spain predicted earlier this month that harmonised inflation will stand at 8.7% this year, upping its earlier forecast of 7.2%. It expects inflation of 5.6% next year followed by 1.9% in 2024.

Nadia Calviño, Spanish Minister of Economic Affairs and Digital Transformation, welcomed the inflation report on Friday and expressed hope that the downward trend would continue.

Speaking at the annual meetings of the World Bank and the International Monetary Fund, she noted “we just got the very good news that the final inflation number for September is below 9%… so the downward trend that started during the summer is accelerating.”

July peak of 10.7%

She reminded that inflation in Spain peaked in July at 10.7% and added “that downward trend should continue in the coming months, provided that energy prices worldwide do not go up significantly.”

The eurozone is struggling to rein in rising inflation, with the European Central Bank (ECB) warning that soaring prices of natural gas and electricity will have negative effects on the economy in the coming quarters.

According to the Bank of Spain, inflation will continue to ease and drop to roughly 3% in 2023. At the same time, the bank lowered its GDP growth forecast for 2023 to 1.4%, pointing to negative effects of rising energy prices and lower consumption.

Calviño reiterated that she is happy with lower rate of inflation and concluded that, according to latest data, the trend will continue in the coming months unless energy prices increase significantly.

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