Inflation in Spain falls to 3.3 per cent at the end of March 2023

According to the National Statistics Institute (INE), inflation in Spain fell to 3.3 per cent at the end of March 2023.

According to the first estimate published this Thursday, March 30, by the National Statistics Institute (INE), inflation in Spain experienced a sharp slowdown in March. It settled at 3.3 per cent year-on-year, mainly due to the marked decline in electricity and fuel prices, according to a first estimate released this Thursday.

The figure, which must be confirmed later, is ‘more than two and a half points below that registered in February’, which was 6 per cent. At the same time, the Harmonized Consumer Price Index (IPCA), which makes it possible to compare with other countries in the eurozone, also fell sharply, three points, to stand at 3.1 per cent.

Core inflation, which does not take into account some prices, such as energy, and which corrects for seasonal variations, on the contrary, remained high, at 7.5 per cent year-on-year, one-tenth less than in February, when it stood at 7.6 per cent.

The marked slowdown in inflation in March – which occurs after two months of slight acceleration – is good news for Prime Minister, Pedro Sanchez, months before the legislative elections at the end of 2023.

In the last year, the government multiplied the budgetary measures to shore up the purchasing power of households, strongly affected by inflation, which last year stood at an average of 8.4 per cent.

At the end of December, the executive announced the abolition of VAT on basic necessities, as part of an aid package of €10,000 million, aimed at curbing the rise in food prices. This measure increased the total amount of aid measures adopted by the Sanchez government in the last year to almost €50,000 million, as reported by lanacion.es.

With inflation at 3.3 per cent in March, Spain is in a much more comfortable situation than most of its eurozone neighbours, where inflation stood at 8.5 per cent year-on-year in February. In its latest forecasts published in mid-March, the European Central Bank said it expected a gradual decline in inflation this year, which should reach 5.3 per cent by the end of the year.

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