Alejandra Olcese

Updated Thursday, February 29, 2024-09:00

  • Forecasts Spain will be the second country in the euro zone that corrects its inflation the least in 2024

  • Taxes The VAT on the electricity bill threatens to rise to 21% in March and the Government has no plans to avoid it

February

ended with a

year-on-year inflation of 2.8%

, which means, on the bad side, that prices are 2.8% higher today than a year ago;

but it implies, for the good, being below 3% for the first time in six months and a moderation compared to January, when the interannual rate stood at 3.4%.

According to the data released this Thursday by the National Institute of Statistics (INE) and which will have to be confirmed in mid-March,

underlying inflation

- which analyzes the price of all the goods and services we consume with the exception of fresh food and energy products as they are volatile - also fell

to 3.4%

(from 3.6% in January), which is its lowest level in the last two years.

The latter is used as an indicator of the inflation towards which the economy tends in the medium term, which underlies specific market movements, hence its name.

That the underlying is higher than the general shows that fresh food and energy are not the main responsible for inflation.

On the contrary, in the rest of the categories it is mainly

processed foods

that are pulling the index.

The

Ministry of Economy

has explained, upon learning of the data, that the decrease in inflation is due "to the downward evolution of electricity prices

and

the stability in food prices", something that the INE has confirmed. .

This organization has also indicated that the price of

fuel

rose this month, unlike what happened in February 2023.

In

monthly

terms , if the prices are compared with those recorded in January, Spaniards will have experienced that their purchases have cost

0.3% more in February than last month

.

The core, for its part, rose 0.5% in one month.

For the year as a whole, experts expect inflation to remain

stable at around 3%

- some months it will be somewhat above and others somewhat below - which would leave the average for the year at that figure, very similar to that recorded in 2024. It is not an alarming price increase but it is above the 2% threshold that the

European Central Bank (ECB)

considers healthy and which it seeks to reach through a restrictive monetary policy.

Although last year Spain was one of the Eurozone countries with the most controlled inflation rate, it is now one of the

large euro economies

with a

sharper price rise

compared to the previous year.

In fact, experts predict that this year Spain will be the country that corrects its inflation the least, as EL MUNDO reported.

This is because our control of the CPI was achieved earlier, so now the rest of the countries are experiencing a decline that we already experienced last year;

to the

withdrawal of anti-inflationary measures

(in January the tax reductions on electricity taxes decreased and the reduction in VAT on electricity is expected to end at the end of March);

to the delay in the execution of European funds, which is delaying the positive impact on the economy;

and to the

wage increases

that are being registered in the country, now higher than those of prices.