Reported by Consejeros Editorial Team
Amid the energy crisis caused by the war in Iran, the CPI stood at 3.5% in July, representing an increase of three tenths of a percentage point compared with the consensus forecast and the figure recorded in June. The National Statistics Institute (INE) has explained that the behaviour of the indicator in July was due to rises in the prices of fuel and lubricants for private vehicles, as well as electricity. Thus, inflation in Spain has now been above 3 per cent for five consecutive months and has reached its highest level in over two years.
According to analysts at Avanza Previsión, “this unexpected spike breaks the plateau on which the Spanish economy seemed to have settled and brings back to the fore the spectre of inflation that refuses to subside”.
Despite the figures, the Ministry of Economy, Trade and Enterprise has emphasised that the Response Plan to the impact of the war in Iran, which remains in place, has achieved its objective and has managed to cushion more than 60 per cent of the price rise caused by this external shock. At the end of June, VAT on fuel was reinstated, but the government partially extended the measures (adjustments of €0.15 per litre in July, to be reduced to €0.10 per litre in August, and the phasing out of the Tax on Electricity Production).
Meanwhile, core inflation, which excludes unprocessed food and energy products, rose by one-tenth of a percentage point in July to 3% year-on-year, contrary to the market’s expectation of a fall of one-tenth of a percentage point.
Bankinter’s strategy estimates that the rise in inflation will gradually reach 3.6%–3.7% by the end of Q3 2026, and 3.3% by December 2026.
On a monthly basis, the CPI rose by 0.2 per cent, four tenths of a percentage point less than in June. With July’s increase, monthly inflation has now risen for six consecutive months. The core rate fell by 0.1 per cent month-on-month, compared with a rise of 0.4 per cent in the previous month.
The INE will publish the final CPI figures for July on 13 August.
