In Spain, August brought inflation readings that were among the lowest in the OECD, with a year-over-year rate of 2.6 percent. This dip followed a broad OECD trend where overall inflation stood at 6.4 percent in August, up from 5.9 percent in July. The Spanish increase from the previous month was modest, reflecting a smaller rise than in many other OECD member countries as energy prices eased from earlier peaks and the rebound in oil was less pronounced than in most members of the organization.
Across the OECD, the inflation picture in August showed a general uptick, while Spain’s figure remained comparatively restrained. Among OECD members, only a few nations reported lower headline inflation than Spain: Denmark at 2.4 percent, Switzerland at 1.6 percent, and Costa Rica registering a negative rate of -3.3 percent. It is worth noting that in August 2022, Spain’s inflation stood at 10.5 percent, slightly above the OECD average of 10.3 percent, underscoring how much more elevated prices were a year earlier.
Spain, like many OECD economies, saw the monthly rise in inflation in August driven primarily by higher oil prices, which nonetheless did not translate into as sharp a year-on-year increase as in July. The energy component’s acceleration was more muted than in July, contributing to a softer annual comparison in August.
Energy decline
In the twelve-month horizon, energy prices fell notably: Spain saw a 24.3 percent decline in July and a further 21.5 percent drop in August. Across the OECD, energy declines were comparatively smaller, at 7.5 percent in July and 1.5 percent in August, reflecting divergent energy dynamics among member countries.
Food prices remained a pressure point for Spain. On an annual basis, August showed food inflation still higher than the OECD average, around 8.8 percent, with July posting 10.5 percent after 10.8 percent in June. This persistence in food costs helped temper the broader relief from energy declines, illustrating the mixed texture of Spain’s inflation story.
Excluding the most volatile components of energy and food, headline inflation in Spain for August stood at 4.8 percent, essentially unchanged from July. By contrast, OECD-wide inflation, stripped of those volatile factors, rose to 6.8 percent, up by about one percentage point. This gap underscores how Spain’s underlying price dynamics were steadier in August compared with the broader OECD trend.
Within the euro area and among EU partners, eleven member countries registered core inflation rates that were lower than Spain’s August reading, even as the euro area overall continued to experience an uptick at 5.3 percent. This contrast highlights how core inflation, which excludes energy and food, can diverge sharply from headline measures depending on country-specific factors and energy markets.
Considering Spain’s key economic partners, headline inflation in August varied: France at 4.9 percent, Germany at 6.1 percent, Italy at 5.4 percent, the United Kingdom at 6.3 percent, the Netherlands at 3 percent, Portugal at 3.7 percent, and the United States at 3.7 percent. Outside the OECD, China showed a near-flat reading around 0.1 percent. These figures reflect a broad spectrum of inflation dynamics across major economies during the month, with Spain aligning more closely to its southern and Western European neighbors in many respects while still differentiating on food and energy contributions.