May inflation edges up to 3.6% while core inflation holds at 3.0%
Inflation registered 3.6 percent in May, up three tenths from April, according to an advance release from the National Statistics Institute. The Economy Ministry explained that this increase mainly reflects the base effect caused by higher electricity prices compared with May 2023 and a smaller drop in fuel prices. Despite the uptick, authorities stress that this is the most moderate month‑to‑month growth since the start of 2024. [INE]
In contrast, the underlying inflation—which strips out unprocessed food and energy—remained steady at 3.0 percent in May, below the overall rate. It nudged up by a tenth, driven by higher prices in tourism‑related services such as travel packages, passenger air transport, and accommodations. This gives a clearer view of price dynamics beyond volatile items, indicating where household budgets are most affected. [Ministry of Economy]
The shopping basket, which had risen from 4.3 percent in April to 4.7 percent in May, remains a key focus as government crisis measures that eliminated VAT on basic foods near expiration. News from April also noted a surge in olive oil prices, up 1.5 percent from March and a total rise of 68.1 percent versus April 2023. Other notable movements included a 1.3 percent uptick in potato prices and a 1.1 percent rise in ready meals. Fruits were about 17.1 percent more expensive than a year earlier, while potatoes had climbed 8.6 percent over the last 12 months. Juices accelerated by 17.3 percent, and frozen legumes and vegetables increased by 7.5 percent. [INE] [Ministry of Economy]
Looking at broader trends, policymakers note that the government’s commitment to remove VAT from olive oil, agreed earlier this year with a political party group, has not yet been implemented. The proposal has stalled in Parliament, having not advanced or been debated for two months. This delay underscores ongoing tensions between economic reform ambitions and parliamentary proceedings, particularly as the fiscal support measures face sunset timelines and political scrutiny. [Ministry of Economy]
Overall, economists emphasize that while inflation persists, the relative moderation in monthly growth offers some relief to households. The price pressures in services tied to travel and hospitality signal where consumer demand remains robust, even as energy and basic foods show divergent paths. Analysts also highlight that external factors such as global energy markets and exchange rate movements continue to influence domestic inflation dynamics, complicating the policymaking landscape. [INE] [Ministry of Economy]