MADRID (Reuters) – Spanish consumer prices rose 9.8% year-on-year in March, their fastest pace since May 1985 and a jump from 7.6% in February, flash data from the National Statistics Institute (INE) showed on Wednesday.
Russia’s invasion of Ukraine and the ensuing economic fallout have fuelled inflation worldwide, especially through increasing prices of energy and grains.
Prime Minister Pedro Sanchez said more expensive electricity and fuel and non-processed food accounted for almost three-quarters of the overall CPI increase. Analysts polled by Reuters had expected 12-month CPI to rise to 8% in March.
“It is bad data. Bad data that affects our economy, our society, particularly the more vulnerable groups,” Sanchez told parliament.
Responding to concerns about the rising cost of living, his government passed a series of measures this week aimed at curbing energy prices.
As inflation in the euro zone speeds up, top European Central Bank officials have insisted the rise is temporary, with ECB Chief Economist Philip Lane describing high inflation as an imported shock that will fade away over time.
“We would still diagnose that this essentially is an imported inflation shock, it’s a supply shock,” Lane said. “Most of this inflation will fade away.”
Central banks are facing a complicated policy dilemma between keeping calm amid the market turmoil while also responding to mounting price pressures.
INE data also showed Spain’s EU-harmonised consumer price index rose 9.8% in the 12 months to March, faster than the 8.1% expected by analysts polled by Reuters and higher than the 7.6% in February.
(Reporting by Aida Pelaez-Fernandez and Emma Pinedo, Editing by Inti Landauro and Catherine Evans)
