• Inflation is entrenched in Spain: the same breakfast rises three times more than in France, twice as much as in Italy and 30% more than in Germany

The

rise in prices

in the

supermarket

condemns Spanish families to have to spend much more for the same.

Only in

food

-food and drinks purchased in the purchase-, each person will spend this year

200 euros more on average

if they buy the same products as last year.

For households of two people, the cost goes up by 400 euros, and for large families of five, for example, 1,000 euros more will be needed.

This is the conclusion reached by

Allianz Research

in its latest report on the

impact of inflation on consumption

, although it warns that "

the worst is yet to come

".

The notice comes because although the

price of food

- cereals, vegetables, dairy products, meat or sugar - has risen

22.8% year-on-year in May,

according to data published this Friday by the United Nations Organization for Agriculture and Food (

FAO

, for its acronym in English), the producers have not yet passed on all this increase in their final prices.

This insurer notes that

European households spend between 12% and 25%

of their total consumption on shopping at the

supermarket

.

The proportion is higher the lower the income of each country.

Given that

Spain

ranks twenty-fifth in the Eurostat average net income per household classification, it is assumed that it

is one of the countries with the lowest income

compared to the rest - the Eurozone average is 20,730 euros per household and in Spain it is at 16,043 euros- and that, therefore,

dedicates a greater proportion of its consumption to food.

The proportion, in turn, varies within each country, being even higher in the

most vulnerable households

.

This is the reason why the poorest families have to bear a higher rate of inflation, because they dedicate more resources to basic needs such as paying the energy bill or buying food.

"For some households, more expensive food will only affect their ability to save, for others it

will be a challenge to meet vital needs

," says Allianz.

Food prices are rising because producers'

production costs

- raw materials and energy - rise.

Past experiences of high inflation show that sellers end

up passing on increases of up to 75%,

which would bring the inflation of food and beverages in Spain to

9.5%

in 2022 , that is, an increase of

200 euros per person

.

If sellers transferred 100% of the increase, prices would rise by an average of 13% in the year.

In Europe, on average, the additional cost will be

243 euros per person.

"This increase in food prices is likely to revive debates about a

possible social benefit to alleviate the burden of inflation on the most vulnerable households

," Allianz experts point out.

Precisely, this is an option that has already been proposed in Spain by

the Economic and Social Council,

which, when presenting its 2021 Annual Report last Wednesday, asked the Government for a similar aid for the Minimum Vital Income to compensate for the impact of increases in prices in households with less income.

The Government has not yet declared itself on this possibility but it has advanced that it is going to extend part of the aid approved to

contain the impact of inflation

and that

new policies could be included.

The sellers have not transferred even half of the costs

To date, the Consumer Price Index (

IPC

) accumulates an

average annual rise of 8.1%

.

In May, prices rose by 8.7% in year-on-year terms, according to data advanced by the INE, and

underlying inflation

- which excludes the price of energy products and fresh food and serves as a thermometer to know the contagion effect to the entire consumer basket- rose by

4.9%

, the largest increase since

1995

.

Even so, Allianz experts warn that "

the worst is yet to come for European households

", because "food prices are far from reflecting the rise in the price of raw materials that has occurred in the last 18 months ".

Since the beginning of 2021, food and beverages in Europe have become more expensive by 14%, with very striking increases in daily consumption products such as

oil

(

+53%

on average on the continent),

flour (+28%)

or

pasta (+19%)

.

Despite the fact that these raw materials have suffered this increase, supermarket labels have experienced an average

increase of 6%

.

"This means that sellers have not passed on even half of the cost increase yet."

The rise in food prices has been exacerbated by the

war in Ukraine

.

On the one hand, the rise in energy prices continues its upward path as

sanctions

are approved on Russian oil and gas, since these automatically make both energy sources more expensive.

On the other hand,

both Russia and Ukraine are exporting countries of cereals

, grain, agricultural products and fertilizers, products that have ceased to be on the market, which has caused a rise in the price of their substitutes and of the final products that used them as intermediate goods. .

According to

Funcas

estimates that had already been collected by this means, inflation will affect the pockets of households directly, subtracting

16,700 million euros from their purchasing power in 2022

.

This means that if all Spaniards maintained their 2021 consumption level this year -not only in food, but also in leisure, clothing, transport, housing costs, etc.- they would have to pay 800 euros more per capita.

Of these, at least an additional 200 euros will be used to satisfy basic vital needs.

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  • Europe

  • Ukraine

  • INE

  • Petroleum

  • Russia

  • Inflation

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