Spanish Inflation Holds at 4.9% in October as Energy Pressures Diverge
Key Facts
Spain’s annual inflation rate held at 4.9% in October, unchanged from September, according to a preliminary estimate cited by Sur in English. Core inflation, which excludes unprocessed food and energy products, remained at 3.1% for a second consecutive month, the report said. The steady readings reflect continued price increases, despite diverging trends in some energy components. A faster decline in vehicle fuel and lubricant prices than in the same period last year helped curb inflation. By contrast, heating fuel and gas prices pushed the index higher.
October’s reading follows a rise in annual inflation to 4.9% in September, up 0.6 percentage points from August, according to data from Spain’s National Statistics Institute. The institute said the September reading was the highest since February 2023, a description that applies to September and does not establish that October set a new record. The October report said the government’s second extension of crisis-response measures was reflected in the month’s index. A 20-cent subsidy for diesel and petrol was also in effect. This places the divergence in energy prices in the context of government measures that included fuel, alongside differing price movements for vehicle fuel, heating fuel and gas.
Stable inflation coincided with slower growth in the Spanish economy. Preliminary data cited by Reuters showed gross domestic product grew 0.6% quarter on quarter in the third quarter, compared with 0.7% in the second quarter. The report does not provide a detailed explanation of the sources of third-quarter growth. On consumer spending, the seasonally and calendar-adjusted retail trade index fell 1.4% year on year in September and declined 0.4% month on month, according to the National Statistics Institute. These data track retail sales, while inflation measures price changes; together, the readings show annual price increases alongside weakness in the adjusted sales index. The figures come ahead of the early general election scheduled for 29 November, amid cost-of-living pressures.
The Bank of Spain raised its growth forecasts for this year and next, citing strong private consumption and increased exports, Reuters reported. At the same time, it warned of risks from higher inflation, international conflicts and rising bond yields. The bank expects gross domestic product to grow 2.2% in 2027, compared with its previous forecast of 1.7%. It said private consumption and exports are supporting activity, while risks surrounding inflation, international developments and bond markets remain. The projections set the third-quarter slowdown against the bank’s estimate of stronger growth next year, without removing the risks it flagged.