Spain’s inflation cools as base effects fade
Inflation in Spain is easing. The base effect from the prior year and falling prices for food and fuel have brought the August early inflation reading down to 2.2 percent, according to the National Statistics Institute. This marks the lowest rate in fourteen months. In June 2023 the rate stood at 1.9 percent, and since then it has not dipped below 2.3 percent.
Rising living costs are eroding purchasing power, pushing savers toward financial assets such as equities or fixed income. In the Ibex 35 there are firms aiming to attract investors with high dividend yields, creating loyal, long‑term shareholders. Today the index includes ten companies that, on average, triple the August inflation, at about 6.6 percent.
Notable among them is Unicaja, which currently offers the highest dividend yield in the national index at 9.65 percent; Caixabank at 8.78 percent; Enagás at 8.19 percent; Banco Sabadell at 8.19 percent; BBVA at 7.73 percent; Repsol at 7.68 percent; Logista at 7.38 percent; Telefónica at 7.21 percent; Mapfre at 7.21 percent; and Bankinter at 6.65 percent. It is striking that of these ten companies, only two trade lower for the year so far, Enagás and Repsol, with declines of 0.84 percent and 5 percent respectively.
The dividend yield is a financial ratio that expresses, as a percentage, the payout to shareholders in the last year relative to the share price. When the share price falls, the yield rises. Yet a paradox emerges: the three best performers this year in the Ibex 35 also rank among the highest dividend payers. Banco Sabadell shows a yearly gain of 68.9 percent, Caixabank 54.9 percent, and Bankinter 41 percent.
La bolsa española, reina del dividendo
Analysts from Mapfre describe the Spanish stock market as a rare global jewel for dividend hunters. They note that the market, along with others such as Australia, is recognized for rewarding shareholders with generous payments. In the previous year, cash dividends rose 19 percent year over year to 30.087 billion euros across 237 payments, with nearly 3.5 billion euros in 10 payments issued as scrip (stock) dividends. The historical average dividend yield over the past 35 years sits around 4 percent, the highest among its peers, according to data from Bolsas y Mercados Españoles (BME). For the current year, analysts expect Spain’s market to reach a record for dividend payments, surpassing the 2014 total when companies paid 43.270 billion euros.
Las letras del Tesoro, otro complemento
Beyond dividends, the yield on Spanish treasury bills also exceeds inflation, allowing conservative savers to protect wealth without the stock market’s volatility. Three-, six- and nine-month T-bills offer returns above 3.1 percent. Many banks continue to refrain from remunerating savings, though in recent months digital subsidiaries have launched campaigns to attract funds.
From Asufin, last Friday noted concerns about the market entry of what is described as a “bonified deposit.” They explain that this product moves from mortgages to fixed-term deposits, such as CaixaBank’s 1 percent fixed rate at 12 months, with improvements tied to other products like alarms or insurance that are typically costlier and with inferior coverage. For example, to offset the basic annual cost of a home alarm (about 960 euros), one would need to maintain a 360,000 euro deposit. The base remuneration, at 1 percent, is viewed as irrational and out of step with the average in neighboring countries. [Attribution: Asufin statements on market practices].
Overall, the April–August inflation moderation, paired with strong dividend payers and the relative attraction of short‑term government debt, shapes a nuanced landscape for both households and investors in Spain. This combination offers some shelter against rising prices while highlighting how equity income strategies continue to draw attention from long‑term holders.
Notes: Figures reflect the latest available data and are subject to revision. Analysts’ projections and cash‑dividend totals are cited from official market data providers and industry commentary.