Inflation in Spain - Statistics & Facts
Inflation is defined as a general increase in the prices of goods and services over a period of time, and implies the decline of purchasing power of a given currency. Yet, inflation is not necessarily a negative process; the European Central Bank aims at keeping inflation below, but close to, two percent. Whereas high inflation rates are a signal of an overheated economy and pose many risks, most economists agree that the impact of small levels of inflation is outweighed by the risk of deflation, that is, a negative interest rate. Nonetheless, the estimated global inflation rate in 2023 was over 6.8 percent, while the Spanish rate was lower at 3.43 percent during the same period and is expected to stay under four percent in 2024.
In Spain, the institution in charge of calculating the CPI is the National Statistics Institute (INE). According to this source, "the index is made based on 220,000 prices of 479 items, belonging to groups that range from clothing to transport and housing".
How is inflation measured in Spain?
The most commonly used inflation index is the Consumer Price Index (CPI). The CPI measures average price changes in a basket of representative goods and services. The Consumer Price Index takes a base year, which is assigned a value of 100, and compares the other prices against it. If the CPI is above 100 in a given year, it means that prices rose (inflation), whereas if it falls below 100, prices fell (deflation).In Spain, the institution in charge of calculating the CPI is the National Statistics Institute (INE). According to this source, "the index is made based on 220,000 prices of 479 items, belonging to groups that range from clothing to transport and housing".
