SPAIN’S inflation rate has fallen to a one-year low of 5.8% according to preliminary December figures published on Friday by the National Statistics Institute(INE).
Inflation stood at 6.5% in December 2021- well before Russia’s invasion of Ukraine, with soaring electricity costs fuelling the rate 12 months ago.
The INE said that falling electricity and fuel prices are behind the latest December fall- down from the previous month’s 6.7%.
It’s also the first time since February this year that an annual reduction in inflation has been recorded.
The overall figure is far better than expected by the government, with Economy Minister, Nadia Calviño suggesting in late November that inflation would ‘stay around’ 7% for the rest of the year.
The INE reported that processed food prices, along with costs for clothes, footwear, and tobacco(IVA tax increased) contributed to the December figures.
Exact details for this month’s food and non-alcoholic drink costs will not be available until mid-January, but November’s inflation for that sector stood at 15.3%.
IVA tax on a basket of basic foodstuffs will be suspended from January 1, along with a halving of tax on oils and pasta to 5%.
The government hopes that will counter-balance the inflationary impact of ending the 20 cents per litre fuel subsidy at the petrol pumps.
Spain’s inflation rate peaked at 10.8% in July with the provisional average for 2022 coming in at 8.4%.
Core inflation- which eliminates volatile food and fuel prices- stands at 6.9%, which is the highest figure of the year, beating the previous high of 6.4% recorded in August.
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