MADRID (AFP) – Spanish inflation ticked upwards in July due to higher fuel prices while growth slowed in the second quarter, preliminary data showed yesterday.
Consumer prices rose 2.3 per cent year-on-year, figures from the National Statistics Institute (INE) showed, up from 1.9 per cent in June when it fell below the 2.0 per cent target set by the Euroepan Central Bank.
The increase in prices in July was due to a rebound in fuel prices, which had fallen in July 2022, as well as higher costs for package holidays, which offset falls in electricity and gas prices, INE said.
In a separate statement, INE said Spain’s economic output rose by 0.4 per cent in the second quarter, down from a revised 0.5 per cent increase seen in the first three months of the year due in part to the poor performance of the country’s drought-hit agriculture sector.
The latest economic figures come after Spain held an inconclusive snap election last Sunday that could result in a repeat election in the coming months. Spain Prime Minister Pedro Sanchez had repeatedly flagged the results of his economic policy to win voter support ahead of the elections in which his party finished second behind the conservative Popular Party.
He is trying to cobble together enough support among smaller parties to stay in power.
Sanchez’s left-wing coalition government has implemented a series of measures to bring down inflation which hit a record 10.8 per cent in July 2022, its highest level since 1985.
Under his watch the economy has outperformed most of its European Union peers, growing by 5.5 per cent last year, and the government expects it will expand by 2.1 per cent in 2023.
The International Monetary Fund (IMF) on Wednesday raised its growth forecast for Spain this year to 2.5 per cent from 1.5 per cent.
