Inflation falls to 1.9% in Spain, down over a full percentage point

The inflation rate in Spain continued the trend seen in the last months in June, according to preliminary data released by Spain's National Statistics Institute on Thursday.

Prices are 1.9% higher than this time last year, when the consumer price index skyrocketed up to 10.2%, one of the highest inflation rates ever recorded in Spain. This explains why some prices are still at a high point compared to where they were before the Ukraine war. 

June's Consumer Price Index (CPI) figure is down over a full percentage point compared with May, when the annual inflation rate stood at 3.2%. 

The decrease is mainly down to fuel, electricity, and food prices decreasing.

In December 2022, the government applied a VAT reduction on basic foods, which was extended this week until the end of the year. VAT on basic foods will continue at 0% and that of oils and pastes at 5%.

The underlying inflation rate, which excludes unprocessed food and energy due to their frequent volatility in prices, has fallen for the fourth consecutive month and now lies at 5.9%. When this indicator falls below 5.5%, the Spanish government will remove the VAT reduction measure on basic foods.