The INE Confirms the Rise in the CPI in February to 3% Due to the Higher Cost of Electricity

The Consumer Price Index (CPI) in Spain rose 0.4% in February compared to the previous month and increased its year-on-year rate by one-tenth to 3%, its highest level since last June, when it stood at 3.4%, according to final data published this Friday by the National Statistics Institute (INE).

With the year-on-year increase in the CPI in the second month of the year, inflation has risen for five consecutive months, according to Europa Press

The agency explained that the rise in the CPI to 3% is due to the rise in electricity prices, compared to the drop in prices experienced in February 2024. It’s worth remembering that as of January 1 of this year, the VAT on electricity returned to 21%, compared to the 10% rate that was in effect until December 31, 2024.

On the other hand, fuels and lubricants for personal vehicles had a downward impact on February inflation, as their prices rose less than in the same month in 2024.

Specifically, the housing group increased its year-on-year rate by two points in February, to 9.8%, due to rising electricity prices, while the transportation group cut its year-on-year rate by one point, to 0.3%, due to the prices of fuel and lubricants for personal vehicles.

The Ministry of Economy, Trade, and Enterprise emphasized in a statement that the spike in inflation in February is “fundamentally” explained by the increase in electricity prices, while also highlighting the drop in core inflation (excluding unprocessed food and energy products) to its “lowest rate in more than three years.”

Specifically, core inflation fell two-tenths of a percentage point in February, to 2.2%, eight-tenths of a percentage point below the overall rate and the lowest rate since December 2021, which also stood at 2.1%.

The underlying inflation figure is one-tenth higher than that reported by Statistics at the end of last month (2.1%), but the overall CPI (3%) and the monthly CPI (0.4%) do match the initial estimate.

The Department headed by Carlos Cuerpo also highlighted that olive oil prices sharply declined in February, with prices falling by 32.3% in the last year.

“In a context of international uncertainty, Spain continues to maintain the highest growth among the major economies in the eurozone, which is compatible with a moderation in prices and gains in citizens’ purchasing power,” the Ministry of Economy emphasized.

The harmonized consumer price index (HICP) remained stable at 2.9% year-on-year in February and increased by 0.4% monthly.

Monthly increases in CPI

In monthly terms (February over January), the CPI increased by 0.4%, two-tenths more than its increase at the start of the year.

With the February spike, inflation has seen five consecutive months of monthly increases.

The monthly increase in the CPI is due to a 0.7% increase in prices for hotels, cafes, and restaurants due to higher food and lodging costs, as well as a 0.6% monthly increase in the transportation sector due to higher prices for fuel and lubricants for personal vehicles, as well as vehicle maintenance and repairs.

In contrast, clothing and footwear prices fell by 1.5% in February due to winter sales.

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(Featured image by Burak The Weekender via Pexels)

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First published in EL INDEPENDIENTE. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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