Inflation in Spain set new record due to rising food and fuel prices

Inflation in Spain continued to rise in November and set a new record a few days before the start of the Christmas season.

According to data from the Spanish statistical office (INE), the annual inflation rate rose two tenths in November compared to the previous month and stood at 5.6%, its highest record since September 1992.

The rise in the advanced Consumer Price Index (CPI) was driven this time by the sharp increase in food and fuel prices, which are basic consumer items for most families.

The estimated annual variation rate of core inflation - an index which excludes the most fluctuating components of the shopping cart such as fresh food and energy products - increased three tenths to 1.7%, which is almost four points below the general CPI.

The unexpected price rises that have occurred in Spain, especially in the second half of the year, caused mainly by higher energy prices and bottlenecks in the supply chain, have spoiled the Government's inflation forecast for this year and next.

Pension increase

If this 5.6% rise is confirmed on 15 December, when the INE publishes the final inflation data, Spanish public pensions will rise by 2.5% in 2022. This rate is 1.6 points higher than the rise in pensions applied in 2021, which was 0.9%.

Since the new revaluation system was approved, retiree pays are updated according to the average annual CPI in the twelve months prior to December. That is, in this case the inflation rates from December 2020 to November 2021 would be taken for the calculation.

According to experts, spending on pensions in Spain will grow next year by around 3,500 million euros due to the increase in inflation.