Has Spain found the right recipe against inflation? In June, inflation fell to 1.9% annually on the other side of the Pyrenees, a figure 1.3 points lower than that of May (3.2%) and 2.2 points lower than that of April (4.1% ), according to the National Statistics Institute (INE).
On the Eurostat side, which uses a harmonized index to be able to compare the countries of the euro zone with each other, Spanish inflation is calculated at 1.6% this month, much lower than that of France (5.3%), Holland (6.4%). , Italy (6.7%) and especially Germany (6.8%).
According to the INE, the strong drop in June is explained by a slowdown in the rise in fuel and food prices. This is encouraging news for the Spanish government, three weeks before the legislative elections, where the current majority of the left could well give way to the right, if the latest polls are to be believed. The Executive, headed by the socialist Pedro Sánchez, boasts of the results of his economic policy carried out to combat galloping inflation – which had reached a maximum of 10.8% in July 2022.
VAT abolition
Madrid has multiplied budget impulses to support the purchasing power of Spanish households. With, as a flag measure, the abolition of VAT on basic necessities, a measure that has been extended until December 31. There are also discounts on fuel, rental blocking or even a cap on public transport prices. The Iberian policy of “whatever it costs” has raised the total amount of the measures adopted by the Government of Sánchez for a year and a half to almost 50,000 million euros.
In addition, the Spanish left the European energy price mechanism, “which allowed them to subsidize gas prices to lower electricity prices,” he adds, also referring to a lower wage increase than in France or Germany.
Optical illusion ?
On behalf of the Government of Sánchez, we also praise the gains in competitiveness of companies, “compared not only to international competitors but also to European ones”, points out Benaouda Abdeddaïm, a journalist from BFM business. In addition, “all the countries that were the bad students of the 2010 and 2012 crisis,” such as Spain or Greece, “could not do anything because they were under control and constrained,” says Marc Fiorentino, a columnist for BFM businessfor whom “the last become the first in Europe”.
But that could only be a farce. “It’s a mechanical effect,” said economist Jean-Marc Daniel.
Especially since core inflation (excluding energy and seasonally adjusted) remains at 5.9%.
Source: BFM TV
