Spanish inflation moderates to 8.4% in April due to fuel discount

The annual inflation rate in Spain is again very high in April 2022, but somewhat lower than in the previous month.

In the midst of economic uncertainty and in a context of rising energy prices, this moderation may be related to the temporary discount on fuel prices approved by the government, which came into force at the beginning of the month.

According to the Spanish statistical office (INE), the estimated inflation rate for April is 8.4%. This is 1.4 percentage points less than in March, when the year-on-year price increase was 9.8%. 

Month-on-month, that is, compared to March, prices in April were 0.1% lower.

For its part, the estimated annual variation rate of core inflation (general index excluding unprocessed food and energy products) increased one point, up to 4.4%. If confirmed, it would be the highest rate of core inflation since December 1995.

This is just a flash estimate. In mid-May, the INE will publish the definitive data, along with the details of the evolution of consumer prices for the different products and services.

Fuel discount

At the moment, the INE has said that the lower growth of inflation in April is due "to the decreases in the prices of electricity and fuel."

On April 1, the discount of 20 cents per liter of fuel at Spanish gas stations came into force. And the Spanish and Portuguese governments have just agreed with the European Commission to limit the price of gas to 50 euros per megawatt hour. Lowering the price of natural gas is decisive to also curb the sharp rise in electricity prices.

For these reasons, experts see it as possible that inflation could decrease further in May.

However, not everything was price moderation in April. The prices of food and non-alcoholic beverages continued their upward trend, the INE said.