INFLATION in Spain this month reached its highest level in 38 years, fuelled by runaway food and energy prices, official data showed today.

Consumer prices rose by 10.8% on an annual basis this month, up from 10.2% in June and the fastest rate since September 1984, the national statistics institute INE said in a statement. 

Like most of its European neighbours, Spain is battling an unprecedented surge in inflation as a result of the economic fallout from the war in Ukraine and the reopening of economies after coronavirus lockdowns.

Already on Tuesday, Economy Minister Nadia Calvino warned that inflation constituted “the main challenge for the Spanish economy.”

The government – which is expecting inflation to slow somewhat in the second half of the year but remain elevated – has unveiled a series of measures to help households and businesses cope with the cost-of-living crisis, such as fuel subsidies and lower electricity taxes. 

According to Socialist Prime Minister Pedro Sanchez, the measures amount to €30 billion (RM136.4 billion), or 2.3% of Spain’s GDP. – AFP, July 29, 2022.