Spain’s Inflation Highest in Nearly Four Decades

Spanish consumer prices have shot up at the fastest pace since September 1984, as inflation in the EU continues to break new records.

Inflation in Spain reached 10.8% year-on-year for July, a jump from its level of 10.2% in June. As with most countries in Europe, Spain is battling a major surge in inflation because of the fallout from the war in Ukraine, as well as the reopening of the economy after COVID-related lockdowns.

Economists say inflation has mainly been driven by higher prices for food, non-alcoholic beverages, electricity and fuel.

The Spanish government says it is expecting inflation to slow in the second half of the year. It has unveiled a series of measures to help households and businesses cope with the cost-of-living crisis, such as fuel subsidies and lower electricity taxes. These measures amount to 30 billion euros, or 2.3% of the country’s GDP.

What does this mean for me? 

Recent figures published by the EU show that annual inflation in the eurozone rose to 8.9% in July, giving Spain the dubious honor of having the highest inflation in that region.

The global economy is in the grip of high inflation, exacerbated by supply-chain constraints because of the war in Ukraine and the lingering effects of COVID-19 lockdown measures. Meanwhile, central banks around the world are scrambling to control rampant inflation that is driving consumer prices through the roof.