Link Securities | According to the final estimate for the figure, released by the National Statistics Institute (INE), the consumer price index (CPI) in Spain rose by 0.8% in September compared with August. This brings the year-on-year growth rate to 4.0% (3.7% in August). The reading was in line with its preliminary one and with analysts’ consensus expectations. Inflation is thus at its highest level since September 2008.
In September, it was electricity and heating, oil and gas prices that contributed most to the rise in inflation. The increase in the prices of fuel and lubricants for personal vehicles, as well as a smaller decline in the prices of package holidays year-on-year also played a role. Elsewhere, prices in the housing group increased their year-on-year rate of growth by three percentage points to 14.5%, due to higher electricity prices. Meanwhile, the year-on-year rate of growth of prices in the leisure and culture group rose by 1.5 percentage points to 0.9%, due to developments in package tour prices.
In contrast, the year-on-year growth rate of food and non-alcoholic beverages prices fell in September by one tenth of a percentage point compared with August, to 1.8%. Compared with August, the CPI was driven up by the 10.9% increase in electricity prices, which accounted for almost five tenths of a percentage point of the total monthly change.
Core inflation, which excludes energy and unprocessed food prices for its calculation, rebounded to 1.0% from 0.7% in August.
In turn, the harmonised CPI (HICP) rose by 1.1% in September compared with August, while the year-on-year rate rose by 4.0% (3.3% in August). Both readings were also in line with their preliminary readings and with analysts’ expectations.
Assessment: persistently high inflation, lasting longer than initially expected, will act as a “tax”, reducing the consumption capacity of individuals and the investment capacity of companies. And, as reflected in the 2022 General Budget, this capacity will already be dampened by a higher tax burden. All this jeopardises the recovery and the official economic growth targets set out.