Sudden Spike in Inflation: March’s Rate of 3.2% Surpasses Expectations, Leaving Spaniards Feeling Squeezed”.

Inflation in Spain Reaches 3.2% in March Following Three-Year Return to 21% VAT

In March, inflation accelerated to reach 3.2% year-on-year, driven by the normalization of the tax rate for electricity and the rise in gasoline prices. This increase was higher than expected by market consensus, with Funcas projecting a lower rate for March. Prices of goods and services in Spain were almost half a point more expensive compared to the previous month.

The monthly price evolution shows a continuous rise since the beginning of the year, with prices increasing by 0.8% in March compared to February, the largest increase since February 2023. The underlying inflation also rose by 0.5% in monthly terms. The provisional data released by the National Institute of Statistics suggest that the underlying inflation rate will be moderated to 3.3%, the lowest rate in the last two years.

Spain is experiencing significant price increases due to various factors such as rising food prices and energy costs. Services are driving prices up more than goods, with products like olive oil seeing significant increases in price. Despite these challenges, Spain remains committed to its economic recovery plan and continues to focus on creating jobs and promoting growth in key sectors like tourism and agriculture.

In March, inflation accelerated to reach 3.2% year-on-year, driven by the normalization of the tax rate for electricity and the rise in gasoline prices. This increase was higher than expected by market consensus, with Funcas projecting a lower rate for March. Prices of goods and services in Spain were almost half a point more expensive…

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