Friday 1/21/22

Spanish inflation ended 2021 at 6.5%, the highest rate since 1992

The upward trend in the prices of electricity and food explain much of this increase
28 December 2021, Spain, Barcelona: Passers-by walk through the shopping street Portal del Angel under Christmas decorations. Photo: Jordi Boixareu/ZUMA Press Wire/dpa.
Passers-by walk through the shopping street Portal del Angel in Barcelona. Photo: Jordi Boixareu/dpa.

Spain closed the year 2021 with the highest price increase since 1992. As confirmed this Friday by the National Institute of Statistics (INE), December closed with an annual inflation rate of 6.5%, basically driven by price increases of electricity and food.

The data published by the INE lowers the advanced inflation rate in December by two tenths.

However, 6.5% is still a very high rate: such a high price increase had not been recorded in Spain since 1992, when the country hosted the Olympic Games in Barcelona or the Universal Exhibition in Seville.

Experts are now debating whether the high inflation suffered by Spanish households is a temporary or structural phenomenon.

While the government says that it is circumstantial, linked to the rise in the price of electricity, there are already more and more voices saying that it could be a general trend: the core inflation -which excludes from the calculation the most volatile elements of the shopping basket like energy and fresh foods, ended the year at 2.1%.

In this case, you have to go back to March 2013 to find a higher rate.

December's rate is one point higher than the previous month, when it was 5.5%. With these data, average inflation for 2021 is 3.1%.

Main increases

The prices that rose the most were those linked to the housing group (23.3%), driven as a whole by the rise in electricity. On the other hand, the prices of diesel for heating acted in the opposite direction, since they were lower than those of 2020.

The prices of food and non-alcoholic beverages also rose by 5%, due to price increases in most of their components. In this group, legumes and vegetables rose especially, and also bread, cereals and meat.

Hotels, cafes and restaurants also increased up to 3.1% due to the increase in the prices of accommodation services.