Inflation continues to dampen family budgets as 2023 evolved into another chapter of price pressure. The late 2022 relief faded quickly, with the Consumer Price Index returning to higher ground and groceries playing a central role in rising costs. Food prices in the province of Alicante jumped by about 16.9 percent last year, contributing to a 2.2 percent increase observed in February. The month’s energy surge is identified as the main driver pushing inflation up to 6.3 percent year over year. Experts agree that the uptrend is not near its end, and the near future remains challenging for households across the region.
Last July the CPI in Alicante mirrored the national movement, peaking at 11.2 percent. A gradual cooling followed, with December showing 5.7 percent, and expectations pointed to continued improvement. Yet early in the new year, that improvement stalled as the cost of living rose again at the start of the year, driven notably by a more expensive shopping basket even after the government reduced VAT on essentials.
February kept the upward march in food prices across the Valencian Community, highlighted by notable increases in fresh legumes and vegetables at 9.7 percent for the month and fresh fruit at 8.2 percent. On a yearly basis, sharper rises emerged in other staples: sugar up 46.7 percent, milk 33.8 percent, oil 33.3 percent, and canned or preserved goods around 25.4 percent. The broader shopping cart continued to show pressure as energy costs rose 3.9 percent in February, following a period of relative stability. Alcoholic beverages and tobacco rose 1.6 percent, entertainment and culture 1.5 percent, and the hospitality sector 1 percent. Transportation and apparel rose more modestly at 0.8 percent and 0.5 percent respectively.
Energy prices were down over the year by 9.9 percent, but food and nonalcoholic items led the gains, followed by spirits and tobacco at 9.6 percent, furniture and household goods at 7.9 percent, restaurants and hotels at 7.6 percent, clothing and footwear at 5.8 percent, and entertainment and culture at 4.5 percent. These figures illustrate how a broad set of categories contributed to the inflation story in the region.
Inflation and employment increase tax collection in the province by 17.6 percent
The main issue remains timing. The path of prices is hard to predict. Finance experts note that geopolitical events and financial shocks can alter the trajectory, complicating short term policy responses. As several influential observers explain, ongoing price pressure in the near term is tied to a long supply chain and external influences that are difficult to counter quickly. The view across local academic circles is that inflation will stay elevated in the coming months until more effective measures can influence the food segment decisively.
One analyst from the Universidad de Alicante attributes the shopping cart pressure to strong demand from multiple European economies and the resulting tension. The province, as a producer of vegetables and fruits, often faces inflation running higher than other regions, an observation emphasized by local scholars.
BBVA Research recently adjusted its Spain growth outlook, lifting the 2023 GDP forecast to 1.6 percent and trimming 2024 to 2.6 percent. The reasoning points to Europe avoiding severe energy restriction scenarios and a lower cost of production, which supports a healthier growth path despite headwinds. These revisions underscore how macro forces mingle with regional price dynamics to shape the local economic picture.
[CITATION: UA] [CITATION: BBVA Research] [CITATION: Local economic analysts]