Spain’s June Inflation: Consumer Prices Slow, ECB Moves Continue
The shopping cart of households kept its upward trajectory in June while inflation cooled to a 1.9 percent annual rise, the slowest pace since April 2021. The final consumer price index reported by the National Institute of Statistics confirms a growth deceleration from May, when prices had been rising 3.2 percent, with a month over month increase of 0.6 percent. This cooling marks a meaningful step away from the recent peak, reflecting a broader trend of slower price gains across the year.
Underlying inflation, which excludes volatile components such as energy and unprocessed food, remained stubbornly high at 5.9 percent in June, climbing 0.5 percent from May. Yet the core trend signals a continued easing in price pressures, with June showing a two-tenths percentage point slower rise than in May.
In terms of sector performance, the food and soft drinks category posted a notable monthly decline of 10.3 percent, slipping more than one and a half percentage points from May. This movement largely stems from lower prices for fruits, bread and cereals, and meat, while dairy products like milk, cheese and eggs showed continued volatility year over year. Legumes and vegetables moved into negative territory compared with the previous year, yet June still experienced year-on-year increases in several staples.
One of the sectors with the strongest monthly gains was tourist packages, up by 11 percent from the prior month. Among foods, fruits rose by 1.9 percent and oils and fats by 2 percent. Prices for vegetables, gas, and clothing also eased in June relative to May, helping to temper overall inflation.
Officials note that the June data confirm inflation fell to 1.9 percent, the lowest point since April 2021. Measures such as temporary VAT exemptions on staple foods and a reduced rate from 10 percent to 5 percent for oils and pastes were extended through at least November if core inflation remains below 5.5 percent in September, with a potential extension through year-end if price pressures stay elevated.
Spain is highlighted as the first major eurozone economy to bring inflation below the 2 percent benchmark set by the European Central Bank, positioning the country among the EU leaders in price stability. Harmonized inflation fell to around 1.6 percent, supporting competitiveness for Spanish firms and preserving households’ purchasing power.
In June, price declines extended beyond food and drinks, with reductions in fuels, electricity, and especially groceries contributing to the softer overall inflation figure. Legumes and vegetables again showed notable price relief as part of the broad moderation in consumer costs.
Moderation in price increases translated into slower growth in the shopping basket. It also supports a lower year-over-year inflation rate and serves as a contrast to the peak of 10.8 percent reached in July of the previous year, a level mirrored by core inflation at 7.6 percent in February. As the year progresses, price gains are expected to slow further, easing household pressures while maintaining steady economic momentum.
Families, facing a higher cost of living, are anticipated to spend roughly 8 percent more than last year on essential goods, according to the national statistics office. This rise marks one of the sharpest increases observed in more than a decade, underscoring the persistent challenge of rising prices for households across the country.
The inflation trajectory influenced monetary policy as the European Central Bank began a cycle of rate increases, lifting the key rate from 0 percent to 4 percent in just one year. This adjustment aims to anchor price stability and support broader economic resilience in the region.