Recent months have driven family budgets to the edge as energy bills spiked and grocery prices kept rising. Efforts to curb electricity costs have helped ease inflation somewhat, yet the overall price pressure remains high. In Alicante, inflation hovered around 11.2 percent in July, while the national rate was about 6.8 percent. Food prices continued to climb, contributing to the strain on households across the country.
November data from the National Statistics Institute show that the shopping cart became 15.3 percent more expensive compared with the previous year, with Alicante experiencing even sharper gains in food and non-alcoholic beverages, now up by more than 16 percent.
Across the country, households spent more to maintain the same pantry. The Family Budget Survey indicates the average annual expenditure per household rose to 4,564 euros, a figure that translates to roughly 730 euros more needed in Alicante to stock the same items as last year.
Buyers at Alicante Central Market reflect the pressure on household budgets. The situation is particularly painful for those already facing mortgage payments or higher heating costs, compounded by expectations of further ECB rate increases in the near term.
Essentials are among the items driving the price surge. Potatoes jumped 21.5 percent nationally, eggs rose 27.1 percent, milk 30.9 percent, and various cooking oils climbed about 31.5 percent. Sweets hit a record increase, up 50.2 percent, underscoring how common grocery staples are driving the inflation narrative.
How much will pensions rise in Alicante next year?
Several consumer groups have pressured policymakers over price controls and VAT adjustments. Organizations have called for temporary VAT reductions and scrutinized profit margins by some retailers, while others argued that price caps were needed to stabilize markets and protect households.
Inflation still outpaces wage growth
Across most goods and services, price pressures persist despite government efforts to contain them. Gasoline and car repairs remain significantly more expensive than a year ago, with new car prices rising and furniture, hospitality, and personal services also showing notable gains. These trends mean many families feel the squeeze in everyday spending.
Household spending and wages in Alicante
Wage growth has begun to lag behind rising costs. While CPI inflation has cooled somewhat, the real income power of workers has not fully recovered. In Alicante, negotiated wage increases have averaged around 3.22 percent this year, versus a 7 percent inflation rate, resulting in a noticeable purchasing power decline. For workers covered by sectoral agreements, increases are slightly better at about 3.26 percent, whereas those on company contracts saw closer to 2.24 percent.
How will housing loans change in Alicante?
The affordability of mortgages looks to be under pressure as borrowing costs rise. Official rates have ticked higher, with projections suggesting continued increases. Mortgage payments have already climbed as Euribor rises, lifting the average payment in Alicante from around 397 euros to roughly 530 euros per month. This shift translates to an incremental annual expense near 2,020 euros and could grow if interest rates trend higher.
Pensions are expected to rise next year as inflation data is used to adjust benefits. The latest data imply an average pension increase of around 8.5 percent, benefiting more than 298,000 retirees in Alicante. The typical monthly benefit would move from about 945 euros to approximately 1,025 euros, improving steady but modestly, the long-term income trajectory for pensioners.
In summary, households in Alicante face a landscape where essentials like food, energy, and housing costs are pushing budgets upward even as wage growth lags behind. Policymakers and organizations continue to monitor prices, seeking measures that can protect purchasing power while keeping inflation within reasonable bounds. The challenge remains to balance the needs of workers, retirees, and homeowners amid ongoing economic shifts.