Fuel prices finally ease the pressure as Spain’s inflation slips to 2.9%

After months of stubborn price rises, December has brought a small but noticeable change of mood for Spanish households. Inflation eased again at the end of the year, helped largely by falling fuel prices, offering a brief sense of relief as families head into 2026.

According to provisional figures published by Spain’s National Statistics Institute (INE), the annual inflation rate stood at 2.9 per cent in December, one tenth of a point lower than in November. It is the second consecutive monthly fall, after inflation reached its highest level in more than a year back in October.

The shift may not be dramatic, but it signals that the relentless upward pressure seen earlier in the year has started to ease – at least for now.

Fuel costs make the difference

The main reason behind the slowdown is straightforward: cheaper fuel. Prices for fuels and lubricants used by private vehicles fell in December, a sharp contrast with the increases recorded during the same month last year. With energy costs no longer pushing prices up, inflation finally had room to breathe.

The INE also highlighted the behaviour of leisure and cultural activities. Prices in this category continued to rise, but at a much slower pace than in December 2024, helping to soften the overall figure.

Not everything moved in the same direction. Food and non-alcoholic beverages once again acted as a counterweight, with prices rising more than they did a year earlier. For many families, this means supermarket bills remain a sore point, even as fuel costs ease and inflation slows on paper.

A calmer end to a difficult year

With December included, Spain closes the year with an average inflation rate of 2.7 per cent, slightly below the 2024 average. The Ministry of Economy described the figure as a sign that households are gradually recovering purchasing power after several years of sharp price increases.

On a monthly basis, prices rose 0.3 per cent in December compared with November, a modest increase that fits with the usual year-end pattern and does not suggest renewed inflationary pressure.

The data suggests inflation is no longer accelerating, even if everyday costs remain noticeably higher than many families would like.

Underlying pressure has not disappeared

While headline inflation has eased, the picture is less clear when energy and fresh food are stripped out. Core inflation, which excludes those volatile items, remained unchanged at 2.6 per cent in December, the same level as in November.

If confirmed, that would be its highest level since December last year, showing that underlying price pressures are still present. That said, the average core inflation rate for 2025 fell to 2.3 per cent, a significant improvement compared with the 2.9 per cent recorded in 2024 and broadly in line with the European Central Bank’s target.

A similar pattern appears in Spain’s harmonised inflation index (HICP), used to compare inflation across the eurozone. The annual HICP fell to 3 per cent in December, down two tenths on the previous month, with a monthly increase of 0.3 per cent. Core HICP inflation is estimated at 2.8 per cent.

The INE will publish the final inflation figures on 15 January, which will confirm whether these provisional numbers stand.

For now, the message is cautiously optimistic. Falling fuel prices have taken some of the heat out of inflation just as the year ends, giving households a small but welcome break – even if food prices and day-to-day costs remain firmly on the radar as Spain moves into the new year.

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