SPAIN’S annual inflation rate dropped to 8.4% in April according to figures published on Thursday by the National Statistics Institute(INE).

The 1.4% drop on the March figure was higher than expected due to lower fuel prices, helped by a 20 cent per litre subsidy on petrol pump costs.

It’s the first monthly inflation fall since January.

The INE said that despite energy prices falling, food and drink costs rose compared to April 2021.

Underlying core inflation however hit its highest level since 1995.

The measurement does not include food and energy products, and went up by 1% on the March figure to 4.4%.

The Bank of Spain on Wednesday doubled its inflation forecast for the rest of the year and 2023 based on energy price hikes.

It warned of risks to an economy that is trying to recover from the effects of the Covid-19 pandemic.

That includes businesses having to cut profit margins and demands by workers for higher wages to keep pace with inflation.

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