Inflation cooled to a stable 3.5 percent in October, according to the latest release from the National Institute of Statistics (INE). The CPI rose by 0.3% on a monthly basis, while the year-over-year rate remained at 3.5%—unchanged from September and marking the highest level since April when it stood at 4.1%. Food prices continued to rise at a brisk pace, with the annual increase reaching 9.5%, only slightly lower than the previous month but still notably elevated.
Looking at the October base effects, electricity prices declined by 2.1% from September. This decrease was not as pronounced as in October 2022, when prices fell by 22.5%. The decline was offset by fuel and landing fuels, which also pulled prices higher for the month, along with relatively moderate growth in food and non-alcoholic beverages. The year-over-year advance in these categories stood at 9.5% as well. Notably, olive oil rose again, increasing about 6% from September and leaving food prices in that category roughly 73.5% higher than a year earlier.
In October, the core inflation index—which excludes the most volatile unprocessed food and energy prices—fell by 0.6 percentage points to 5.2%, the lowest rate since June of the previous year.
Because November’s inflation data has not yet been released, October numbers enable a provisional estimate for the 2024 pension adjustment. The average inflation rate from December 2022 through October 2023 stands at 3.9%. The pension increase for the following year is tied to the average inflation from December to November of the next year. Once November’s advance data becomes available on November 29 and the final data is published on December 14, the precise pension increase for 2024 will be confirmed.
From the government’s economy perspective, the policy measures enacted have helped Spain post solid performance. The combination of lower inflation and healthier growth has supported the eurozone’s broader development, contributing to greater competitiveness for Spanish firms and higher purchasing power for wage earners. Most anti-inflation measures implemented by the administration are set to expire on December 31. Ahead of year-end, the executive will decide which measures, if any, will be extended into 2024 to sustain momentum and protect household purchasing power.