Inflation in December finished 2023 at 3.1%, a clear step down from the 5.7% end-of-2022 figure. The National Institute of Statistics released December CPI data on Friday, confirming progress noted earlier by INE on the 29th of last month. The annual rate eased by a tenth to 3.1%, helped in part by stable food prices. Food and non-alcoholic beverages held steady from November, despite the seasonal enthusiasm around the holidays.
Monthly CPI data show zero change for the food and non-alcoholic beverage group compared with November. On an annual basis, this category was 7.3% more expensive than in December 2022. While still high, this is well below the peak levels seen earlier in the year, trending down from a January/February high around 15.4% and against a March high of 16.5%.
Olive oil, a central driver of food inflation throughout 2023, rose again in December compared with November by 0.5%. By year-end, olive oil remained 54.6% more expensive than December 2022.
The largest monthly increases in food occurred during the Christmas period, with lamb up 4.4% and fish up 1.2%. By contrast, some items declined: fresh fruits fell 2.9%, legumes and vegetables fell 0.9%, and alcoholic beverages dropped 1.6%. Looking at the full year, olive oil rose 54.6%, oils and fats climbed 36.3%, fresh vegetables and fruits increased by 13.2%, fruit by 11.8%, pork by 12.3%, and lamb by 9.7%. Eggs were up by as much as 4.4% and sugar by 6.2%, while milk was 1.3% cheaper in December than in December 2022.
INE’s data generally point to a downward inflation trend throughout 2023, albeit with some fluctuations linked to energy costs. Energy prices continued to ease while food costs remained elevated. The year-over-year pace only slipped into single digits in the last three months of the year.
December energy prices fell by 6.4% year over year, while food and non-alcoholic beverages rose by 7.3%. If the more volatile energy and unprocessed food components calm, core inflation dropped decisively to 3.8% by year-end, easing from 4.5% in November.
Aligned with EU standards, the Harmonized Index of Consumer Prices (HICP) for December stood at 3.3%, slightly above the euro-area provisional average of 2.9%.
Electricity posted a monthly gain of 2.4% in December, consistent with a substantially lower average bill compared with December 2022. Gas and city gas showed a monthly dip of 0.8% against December 2022 and an annual drop of 20.3%. Diesel fell 4.5% month over month, though the annual change remained positive at 2.7%. Gas prices, while 10.3% higher than a year earlier, decreased 3.5% in December versus November.
December data set the 2023 average inflation at 3.5%. That rate largely matches the 3.49% average salary increase agreed in collective bargaining through November, suggesting that negotiated wages did not erode purchasing power in 2023.
The Ministry of Economy regards the CPI results as evidence of policy measures successfully maintaining inflation on a downward path, allowing salaries to strengthen and helping Spanish companies stay competitive even amid a challenging global context. The ministry highlights that the trend supports continued purchasing power gains in the near term.
Between the extremes of the Canary Islands and Extremadura
Among autonomous communities, the Canary Islands posted the highest inflation in 2023 at 3.8%, while Extremadura registered the lowest at 2.4%. Catalonia stood at 3.2%, just above the national average. The year closed with many regions above the national rate, though a few lines dipped below or matched the average depending on local conditions.
Overall, the national average stood at 3.4% for most of the year, with some regions such as Melilla and Castile-La Mancha showing around 3.3% or a touch higher. Other communities like Catalonia and Galicia balanced near the national figure, while La Rioja and the Basque Country mirrored the 3.1% national mark. Navarra and Asturias landed closer to, or just below, the average in 2023, with Castile and Leon around 2.8%, Madrid at 2.7%, Aragon at 2.5%, and Extremadura at 2.4%.