Spain: Inflation slowed markedly in May, to 3.2% over one year

Inflation slowed markedly in May in Spain to return to 3.2% over one year, mainly thanks to the drop in fuel prices, according to a provisional estimate published on Tuesday by the National Institute of Statistics (INE). This rate, which has yet to be confirmed, is 0.1 point lower than that of March (3.3%) and 0.9 point lower than April (4.1%), marked by a rebound in inflation. It allows Spain to move away a little further from the peak of 10.8% reached in July, a record since the start of the statistical series 38 years ago, and to approach the target of 2% set by the Bank Central European.

According to the INE, the slowdown in May is explained by the drop in fuel prices and, to a lesser extent, by a less marked rise in food prices than last year. The harmonized consumer price index (IPCA), which allows comparisons with other euro zone countries, rose by 2.9%, or 0.2 points less than in April (3.1 %). Core inflation, which does not take energy prices into account and which is adjusted for seasonal variations, fell by 0.5 points, to reach 6.1% over one year.

The Spanish left-wing government has multiplied budgetary measures for 18 months to support the purchasing power of households, strongly affected by inflation which amounted to 8.4% on average last year. At the end of December, he announced the abolition of VAT on basic necessities, as part of a 10 billion euro aid package intended to stem the rise in food prices. This measure brought to nearly 50 billion euros the total amount of measures taken by the Sanchez government for more than a year to help the Spaniards.

With this figure of 3.2%, Spain is in a more comfortable situation than most of its neighbors in the euro zone, where inflation reached 7% over one year in April. This dynamic is often put forward by the government, faced with a discontent linked to the decline in purchasing power, which according to analysts partly explains the defeat of the left in the Spanish local elections on Sunday. This defeat prompted Socialist Prime Minister Pedro Sanchez to call early legislative elections on July 23, deemed to be off to a bad start for the left.