One of the defining topics of the year has been the pressure on household budgets, with expectations that the trend could persist into the next year. Actions such as eliminating VAT on essential items—bread, eggs, milk, fruit, and vegetables—and cutting the oil and pasta VAT from 10% to 5%, along with a 200 euro support payment for vulnerable families, shaped the conversation about what happened in 2022 and what might come next.
According to the National Institute of Statistics, food prices rose 15.3% in November compared with a year earlier. That means food costs have become a larger share of overall living expenses, with the Consumer Price Index showing a rapid climb earlier in the year and a slower pace by late autumn. Core inflation, which excludes volatile items like energy and unprocessed food, stood at 6.9% in December, still well above the long term average. These figures illustrate a persistent upward drift in food costs alongside broader price trends. (INE)
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Following the latest detailed INE data, several categories showed notable price increases in November. Items with sharp gains included non olive oils, candy, pasta, butter, sauces, skimmed milk, and various bakery products. These foods highlighted the strongest price acceleration so far this year. It is important to note that rising prices do not necessarily mean those items are the most expensive on the supermarket shelf; they are simply the ones that climbed the most compared with the same month in the prior year. (INE)
Prices may fluctuate based on harvest yields, production costs, or disruptions in supply routes. As explained by Francesc Reguant, chair of the Agri-Food Economics Commission, several factors push the chart upward, including global events that affect basic inputs. The war in Ukraine has disrupted the supply of grain, sunflower oil, and fertilizers, affecting the price dynamics of staple foods. (Industry commentary)
Today a basket of ten essential food items for a balanced diet costs around 25 euros. The average price in the three largest Catalan supermarkets covers items such as pasta, lentils, extra-virgin olive oil, ground beef, a can of milk, a dozen eggs, along with leafy greens, potatoes, an orange, and a loaf of bread, all chosen as private labels for consistency. (Market data)
Economist Francesc Reguant notes that some relief could come through forecasts of future markets, where short to long term purchase and sale terms start to balance out. He predicts a roughly 2% increase a year from now, a much slower pace than seen recently, driven in part by falling energy and fuel costs. Still, uncertainty remains high. If the conflict eases, prices could stabilize; if it escalates, price levels could rise sharply. (Forecast commentary)
One proposed policy is the abolition of the 4% VAT on a wide range of staples and a reduction from 10% to 5% on oil and baking ingredients. Officials aim to keep inflation under 5.5% by midyear, with a one-time 200 euro payment for households earning under 27,000 euros and with assets under 75,000 euros excluding the family home. For a typical four-person family, savings from the measure could reach about 122.84 euros, roughly 3.5 euros per week. (Policy proposals)
Industry groups and the retail sector have urged lowering VAT on food to ease consumer costs. They note that similar measures were implemented in other countries with positive short term effects and have advocated temporarily suspending environmental taxes to ease pressure on prices. (Industry advocacy)
The Consumers and Users Association has called for a temporary VAT reduction on a core set of basics such as fruits, vegetables, pulses, rice, pasta, meat, fish, milk, eggs, and bread. (Consumer advocacy)