Spain | Looking past the inflationary surge in 2021
For the first time in nearly a decade, Spain will see inflation average over 2% this year. Indeed, in the final months of the year, consumer prices could hit 3%. But beyond this year’s surge in prices, we still anticipate the medium-term inflation outlook to be moderate.
What you will learn:
- A rise in energy prices is common across Europe but the impact is particularly acute in Spain, where it’s driving around 75% of the inflationary surge. In particular, soaring electricity prices, up 40% from last year, are dominating inflation dynamics at the moment.
- So far, core inflation has remained close to zero. But we expect underlying price pressures to rise substantially toward the end of the year, partially driven by base effects.
- Beyond this year, however, we struggle to see evidence for a sustained rise in core inflation given the amount of slack in the economy.
Tags:
Related Services
Post
Japan’s older households to support spending under higher rates
The resilience of consumption is essential to support sustained wage-driven inflation and the Bank of Japan's rate hikes. We see little risk of spending faltering due to the projected gradual rate hikes to 1% because the ageing of society has made households' balance sheets less vulnerable to rate increases.
Find Out More
Post
What a Russia-Ukraine ceasefire means for Europe
A ceasefire between Ukraine and Russia would provide a modest boost to EU economies, mainly due to higher military spending prompted by increased security fears and lower gas prices. But the outcome is beset by risks, particularly if the settlement is on Russia's terms.
Find Out More