Preliminary data from the National Institute of Statistics (INE) showed, on Thursday, that consumer prices in Spain increased by 1.9 percent on an annual basis in June, marking the lowest level since March 2021, but it fell by more than one percentage point compared to last May.
The institute said: “The decrease in inflation in June is mainly due to the significant slowdown in the prices of fuel, electricity, food and non-alcoholic beverages, compared to what they were in the same period a year ago.”
“Spain is the first among the large economies of the eurozone in which inflation has fallen below 2 percent, which is the target of the European Central Bank,” the Spanish Ministry of Economy said in a statement.
The new data gave new hope to Prime Minister Pedro Sanchez, who has repeatedly touted the results of his economic policy in order to make gains in opinion polls as the Socialists outpace the right-wing Popular Party.
Sanchez’s leftist coalition government implemented a series of measures to bring down inflation, which hit a record 10.8 percent in July 2022, the highest level since 1985.
Using the ECB’s preferred measure, known as the Harmonized Index of Consumer Prices (HICP), Spanish inflation eased to 1.6%, or 1.3% below May’s figure of 2.9%.
Core inflation, which is seasonally adjusted and excludes energy, fell 0.2 percentage point to 5.9 percent year on year.
The Sanchez government has implemented a range of budgetary measures to boost the purchasing power of households hit hard by inflation, which averaged 8.4 percent last year.
At the end of December, the Spanish government abolished value-added tax on a range of basic foodstuffs in a measure that was extended this week until the end of the year. The move increased the total amount announced by the Spanish government to help those suffering from high inflation and food and energy prices by nearly 50 billion euros ($54.57 billion).
Eurostat figures showed that the inflation rate for June put Spain better than most of its neighbors within the eurozone, with inflation reaching 6.1 percent year-on-year in May.
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