Alex Trelinski
SPAIN’S inflation rate fell to 2.3% in March- the lowest figure in five months- after reaching 3% in February.
Details released on Friday by the National Institute of Statistics showed that electricity prices had gone down as a result of heavy rain.
The wet weather allowed reservoirs to reach an average 70% of capacity, allowing energy prices to fall within the hydroelectric power sector.
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Wind power production increased by 12% and nuclear by more than 50%.
Analyst, Francisco Valverde, told the El Pais newspaper that hydro-power, wind and solar energy are leading to the fall in wholesale electricity market prices.
“We are releasing a lot of cheap water along with very strong wind energy production coupled with a reduction in demand as winter is over,” he commented.
Fuel prices have also fallen with pump costs at their lowest since last mid-November.
Core inflation, which strips the volatile elements of fresh food and energy, dropped to 2%.
That’s the lowest rate for more than three years- since December 2021.
Experts believe that the general inflation rate will be around 3% over the next few months, but there is uncertainty what will happen over the energy and fuel markets, plus the effect of Trump tariffs and what is happening over Ukraine.
