Inflation reached 9.8% in Spain in March, assured the National Institute of Statistics (INE) in a press release, Wednesday, March 30.

Such a level had not been reached "since May 1985".

This figure is “up more than two points” compared to February, when inflation had already risen to 7.6%.

According to the INE, this dynamic is mainly due to soaring electricity and fuel prices, but also to the rising cost of food products, aggravated by the Russian invasion of Ukraine.

This situation "affects our economy, our society, and in particular the most vulnerable groups", recognized the socialist Prime Minister Pedro Sanchez, during a speech in the Chamber of Deputies.

A "kind of energy shock" induced by the war in Ukraine

Core inflation – which does not take into account certain prices such as those of energy, and which is adjusted for seasonal variations – has, for its part, increased by 0.4 percentage point compared to February, to reach 3.4% over one year, said the public body.

The governor of the Bank of Spain, Pablo Hernandez de Cos, said on Tuesday that he expected a "new, very significant rise in inflation in March" due to the war in Ukraine, causing a "kind of shock energy".

Because of this situation, "the country is poorer today than it was a few months ago because there are a series of energy products that Spain does not produce and which it needs to produce the rest goods and for final consumption, and these products are more expensive today," he said.

A national response plan

In an attempt to cushion the consequences of the war, the government of Socialist Prime Minister Pedro Sanchez adopted, on Tuesday, a direct aid plan of six billion euros for households and businesses, mainly targeting the prices of energy.

This plan includes a subsidy of 20 euro cents on fuel, a 15% increase in the amount of the minimum subsistence income, paid to the most vulnerable families, and extends until June 30 the tax cuts in force since summer and intended to reduce electricity bills.

"We are convinced that this national response plan, as well as the agreement reached in Brussels to set a reference price for gas (...) will allow us in the near future to bend the curve" of inflation "and to stabilize the evolution of the cost of living", assured Pedro Sanchez.

With AFP

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