Inflation in Spain saw a significant decline in May, falling by three-tenths of a percentage point to 1.9%. This marks the lowest figure since October of last year, when it stood at 1.8%. This development, announced by the National Institute of Statistics (INE) on Friday, highlights a continued easing of price pressures in Spain.
Three Consecutive Months: Inflation Rate on the Decline
With the current drop, the trend of a falling annual inflation rate in Spain continues for the third consecutive month. This is a positive sign for the Spanish economy and consumers.
Reasons for the Decline: Tourism, Transport, and Electricity Prices
According to the INE, several factors are responsible for the weakening of the Consumer Price Index (CPI) to 1.9%. More favorable recreational and cultural insurance and a noticeable fall in transport prices played a significant role. Furthermore, electricity prices increased less in May than in the same month of the previous year. Sources from the Ministry of Economy, Trade and Business, led by Carlos Cuerpo, particularly highlighted the positive development of tourism-related services and the favorable trend in electricity prices as crucial factors.
Spain Below ECB Target: Robust Economic Growth
The Ministry of Economy also emphasized that inflation in Spain remains below the 2% reference level set by the European Central Bank (ECB). This demonstrates the stability of the Spanish economy. “The Spanish economy continues to show a great ability to combine a continuous decline in inflation with one of the highest growth rates among industrialized countries, which is particularly relevant in the current context of high international uncertainty,” the Ministry of Economy added. This underscores Spain’s resilience and growth potential in a challenging global environment.
Core Inflation Follows Trend: Relief Even Without Volatile Components
Core inflation, which excludes unprocessed food and energy products, thus providing a clearer picture of underlying price developments, also softened in May. It fell by three-tenths of a percentage point to 2.1%, which is two-tenths above the general index. After a slight recovery in April, core inflation is resuming its downward trend. On a monthly basis, the CPI remained unchanged in May compared to April, ending the series of monthly increases over the past seven months.
Harmonized CPI Confirms Development
The Harmonized Consumer Price Index (HICP), used for European comparisons, also reduced its year-on-year rate in May by three-tenths to 1.9% and recorded a monthly decrease of 0.1%. Core HICP inflation for May is estimated at 2.1%. The INE will publish the final CPI data for May on June 13.
