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Inflation rises to 3.2% in March due to gasoline and electricity bills

The Consumer Price Index (CPI) rises from the February lows (2.

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Inflation rises to 3.2% in March due to gasoline and electricity bills

The Consumer Price Index (CPI) rises from the February lows (2.8%) since August 2023 and is once again above 3%, a percentage around which the indicator is expected to oscillate throughout the year.

The CPI rises in March in all the autonomous communities: Extremadura presented the highest inter-annual rate (3.6%) and La Rioja, the lowest (3.0%) together with the autonomous city of Melilla (2.7%) . Above the national average are also the Canary Islands and Galicia, both at 3.5%, Navarra (3.4%), and Castilla-La Mancha, Comunitat Valenciana and Murcia (3.3%).

The increase is, once again, a step effect due to the rise in electricity and fuel prices compared to the drop in energy prices a year ago. Specifically, it has been the result of the withdrawal of tax cuts after almost three years to contain the inflationary escalation after the start of the war in Ukraine: the VAT on electricity and the Special Tax on Electricity and the return of the Tax on the Value of Electrical Energy Production (IVPEE).

The shopping basket this month of March rises less than in the same month of 2023, in line with previous months. The year-on-year increase in food prices moderates to 4.3%, one point less than in February and its smallest increase since November 2021.

The Ministry of Economy points out that the slight increase in the CPI in March was fundamentally due to the normalization of the VAT on electricity after almost three years of applying the reduced VAT, and especially highlights the moderation of the price of food, whose rate has been reduced more than 12 points in the last year.

Core inflation, which excludes the most volatile prices of food and energy products from the statistics, moderates two tenths to 3.3%, just one tenth above the general CPI and the lowest rate in the last two years.

In a month-on-month comparison, prices rose eight tenths, their third consecutive monthly increase and the most pronounced since February 2023, when it rose 0.9%.

The Harmonized Consumer Price Index (HICP) rose four tenths in year-on-year comparison to 3.3%, just one tenth of the general CPI.

The consumption groups that most pushed up the March CPI were housing (expenses associated with housing, not the price of housing itself, the largest item of which corresponds to the electricity bill), tourism and transport.

Specifically, housing increases 4.2 points, up to 1.5%, due to the electricity bill; leisure and culture rose 3.8%, mainly due to tourist packages; and transportation, which increased 2.9% due to the prices of fuels and lubricants for personal vehicles.

On the other hand, food and non-alcoholic beverages have a rate of 4.3%, one point below that of last month, due to the drop in prices of legumes, vegetables and other food products. Meat prices rise to a much lesser extent than they did a year ago.

In one month, what has increased the most has also been housing, with a variation of 2.2% due to the increase in electricity; leisure and culture, which increased 1.8% due to tourism and hotels, cafes and restaurants. Clothing and footwear also become more expensive as a result of the beginning of the spring-summer season and transportation due to the rise in gasoline prices.

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