December 2022 Inflation Reaches a Peak Yet Slows Overall, With Food Costs Leading the Charge
The final 2022 numbers from the National Institute of Statistics reveal a mixed picture for inflation in Spain. Prices overall rose by 5.7 percent in December compared with the previous year, a slight drop from the figure that had been anticipated earlier in the month. The December CPI release, issued on a Friday, confirmed a marginally lower annual rate than the year before, with INE projecting a 5.8 percent increase on December 30. In December alone, food prices surged more sharply than other categories, while energy product prices showed a notable discount compared with December 2021.
Within the food sector, increases were most conspicuous in staples such as dairy products, cheese, eggs, and cooking oils. These rising costs contributed to the persistent pressure on household budgets as the year closed, underscoring how food affordability remained a central concern for many households.
Despite the strength seen in food prices, the overall inflation rate demonstrated a clear downward trajectory by year-end, easing by about one percentage point from November. The decline extended to roughly five percentage points from the peak reached earlier in the year, signaling a softening trend that observers hoped would continue into the new year.
On the other side of the ledger, core inflation — which excludes the more volatile prices of energy and unprocessed foods — remained elevated. The latest readings put core inflation at around 7 percent, matching a three-decade high and nudging higher by about one-tenth from earlier December projections. The rise was attributed to recent price increases in items such as clothing, footwear, and certain unprocessed food products, which together pushed the core measure higher than anticipated.
The December data suggests that the rapid escalation in energy costs is increasingly feeding through to the prices of goods and services that are central to family budgets. Taken as a whole, the categories that carry a significant weight in the CPI continued to push the inflation rate higher, with energy-related components and other durable goods contributing to the upward pressure even as other sectors cooled off.
Additionally, Spain posted one of the higher inflation rates in the euro area during December, with an average around 9.2 percent. Government officials attributed this relative resilience to the effectiveness of anti-inflation measures implemented over the year. December also marked the final month of broad consumer discounts that had been in place, including a temporary reduction in the value-added tax on certain foods and a now-expired 20-cent-per-liter fuel subsidy that ended at the start of January. These measures helped soften some prices at the pump and in groceries, yet the overall inflation picture remained shaped by broader energy dynamics and supply constraints that persisted into year-end.
Observers note that the December figures do not tell the whole story of price movements in 2022. While the annual inflation rate eased slightly, the persistence of higher core inflation signals that households should still prepare for ongoing budget planning. Policymakers continue to monitor the balance between energy costs, food prices, and consumer demand as they consider steps to stabilize prices without sacrificing economic growth. The December release underscores the need for continued vigilance in the months ahead, even as late-2022 data shows some cooling in overall inflation and sustained pressure in specific sectors.