(Reuters) – Inflation slowed more sharply than expected in March in Spain to fall back to its lowest since August 2021, to 3.3% year on year after 6.0% in February, data released on Thursday showed. National Institute of Statistics (INE).
Analysts polled by Reuters had forecast an inflation rate of 3.8%.
This slowdown is mainly linked to the drop in electricity and fuel prices which had risen sharply in March last year, the INE said.
Core inflation, which excludes volatile fresh food and energy prices, fell slightly to 7.5% year on year this month, from 7.6% in February.
Soaring food prices, up more than 16% in February year on year, have severely affected the purchasing power of Spanish consumers.
The Spanish government has reduced VAT from 4% to 0% on certain foods deemed essential such as bread, cheese, milk, fruit, vegetables and cereals.
Spain’s Economy Minister Nadia Calvino said this month to expect lower inflation this year compared to 2022, while warning of high month-to-month volatility.
Harmonized with European standards, inflation in Spain stood at 3.1% over one year in March, against 6.0% in February and a Reuters consensus of 4.0%.
(Report Matteo Allievi; Claude Chendjou, edited by Bertrand Boucey)
Copyright © 2023 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
