The price increases affecting both businesses and ordinary households are already shaping forecasts and are likely to ease over time. In Alicante, inflation has surged, rising 10.5% year on year. The housing component led with higher costs driven by electricity, followed by transportation due to spikes in gasoline and diesel. This worrying climate has unions pushing for salary reviews, while employers warn that repeated price and wage gains could feed a cycle of further rises.
The National Institute of Statistics (INE) confirmed that Spain’s annual CPI climbed to 9.8% in March after a 3% rise in February, the highest since May 1985, in a context intensified by the Ukraine conflict.
In Alicante, inflation is even more pronounced, with a 10.5% year over year increase. For 2022, the cumulative rise is estimated at 3.8%, compared with a national monthly rate of 3.3%. Like the national pattern, housing, electricity, and gas surged the most, up 37.6% on an annual basis. Fuel-based transportation also contributed a large rise at 20.1%. Food prices climbed 7.7%, drawing particular attention for households. Across the province, all categories except clothing and footwear, kitchenware, and entertainment and culture showed above-average increases.
In this environment, unions warn that workers’ purchasing power is at risk. Paco García, secretary for CC OO in l’Alacantí and Les Marines, said price growth in Alicante has hit harder than in many other provinces due to generally lower local wages. He stressed the need for salary review clauses in contracts so that the working class does not bear the burden.
Yaissel Sánchez, secretary of UGT at the border area, echoed these concerns and called for clauses in agreements. She added that it remains to be seen how measures by central and regional governments will affect outcomes, but the responsibility to defend workers’ buying power remains clear. She urged balanced, pragmatic agreements that consider the challenges faced by companies and workers alike.
Inflation clouds tourism expectations
From the Valencian Community Business Confederation (CEV), there is a call to avoid a scenario where rising goods and wage costs push inflation higher. If labor costs stay elevated, inflation’s persistence could become more entrenched and durable.
CEV emphasizes the urgency of faster action by European, national, and regional authorities to implement measures that reduce energy and raw material prices. The goal is a price and cost trajectory that supports sustainable growth for Alicante’s economy.
Thirty-five regions have reported double-digit inflation above 10%. Besides Alicante, regions such as Albacete, Cantabria, Castellón, Valencia, Málaga, Murcia, La Rioja, and others show similar trends. The highest year-over-year increases are seen in Toledo at 12.6%, León at 12.5%, Huesca at 12.2%, and Ávila at 12.0%. On the opposite end, Ceuta recorded 7.8%, with Santa Cruz de Tenerife at 8.3%, Las Palmas at 8.5%, and Guipúzcoa at 8.8%. In the Valencian Community, Castellón rose by 11.9% while Valencia reached 9.7%. [Source: regional inflation reports and official statistics]