By John Smith • 30 September 2021 • 16:39
Inflation basket to get major shakeup
IN case you haven’t noticed prices in Spain continue to rise and according to advance figures released by the National Institute of Statistics (INE), inflation in September is up to 4 per cent.
This is based on the Consumer Price Index (CPI) which provides a statistical measurement of the evolution of the set of prices of goods and services that the resident population in family dwellings in Spain consumes.
This index is made up monthly by logging 220,000 prices from 479 articles, of 29,000 establishments based in 177 municipalities in the whole country and the data is obtained by a combination of visits, telephone calls and emails so is considered relatively accurate.
Assuming this initial indicator is accurate then inflation is up by 0.7 per cent over the August figure and will be at the highest level since 2008.
Some argue that inflation, if kept relatively steady and low, is a positive influence on any economy as it means that the supply of money is greater than the demand for money and this helps to increase business turnover and makes the economy healthy.
Whilst this is positive for manufacturers and retailers it hits the consumer in the pocket and can also make exports less attractive.
The latest increase in inflation is to a great extent due to the massive increase in the cost of both electricity and fuel for vehicles and compares to drops in prices during 2020.
With a huge influx of money from the EU Recovery Fund however, there is a chance that if the Government doesn’t control spending, then inflation will continue to rise.
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Married to Ophelia in Gibraltar in 1978, John has spent much of his life travelling on security print and minting business and visited every continent except Antarctica.
Having retired several years ago, the couple moved to their house in Estepona and John became a regular news writer for the EWN Media Group taking particular interest in Finance, Gibraltar and Costa del Sol Social Scene.
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