Inflation climbed to 2.7% in July, weighed down by energy and fuel prices.

Despite leading the eurozone in economic growth, most Spaniards feel like they're struggling. Our purchasing power is being eroded by insufficient wage increases, among other things, while the cost of living is rising. Goods and services in general are becoming more expensive every month, even chocolate . In July, inflation rose to 2.7% , weighed down by the prices of electricity and fuel, according to data released last month by the National Institute of Statistics (INE) .

Thus, the Consumer Price Index (CPI) increased four-tenths of a percentage point compared to the sixth month of the year , when it rose from 2%—the target set by the European Central Bank—to 2.3%. At the time, sources from the Ministry of Economy stated that the figure confirmed a tendency toward stabilization around the reference percentage set by the institution chaired by Christine Lagarde. Far from this "stabilization," the price of the goods and services we consume will rise for another month.

The INE points to housing and transportation as the main groups responsible for the increases, which increased by two and a half points, to 6.7%, and one point, to 0.2%, respectively. Thus, the rise in the price of electricity, justified by a base effect associated with the fall in the cost of electricity in July 2024, and, to a lesser extent, the rise in fuel prices, weighed on both indices, according to the Ministry.

On the other hand, processed foods contributed half a tenth of a percent to the decline. An example of this is the cumulative 50% drop since the peak in April 2024 in the price of olive oil , which, in line with its original value, is now in line with the price reached in 2022, the year before the last period of drought.

Thus, excluding energy and unprocessed food, core inflation registered a slight increase to 2.3% in July.

For its part, the department headed by Carlos Cuerpo asserts that the month-over-month increase in inflation is "compatible" with the "strong dynamism of the Spanish economy," which the government is keen to reiterate, boasting that Spain remains "an engine of growth among the leading European countries." They continue, "price stability, record job creation, and rising wages are allowing families to progressively recover their purchasing power ."

However, the other side of the coin shows that while the average gross Spanish salary was €1,987 per month —data from the end of 2024—after sustained growth since 2021, the reality is that this growth has not been at all in line with the current environment. Real wages in Spain have only grown 2.76% over the last 30 years ; that is, between 1994 and 2024, our purchasing power has barely increased by 0.1% per year. In practice, this means that the slight growth in wages has been stagnating our purchasing power for some time. Thus, Spain has the fourth-worst performance of the 38 member countries of the Organization for Economic Cooperation and Development (OECD), hampered by stagnant productivity, according to the organization itself.

Furthermore, compared to the eurozone average, Spain's inflation is seven-tenths of a percentage point higher than the July forecast for the eurozone as a whole. Pending confirmation, inflation in the group of countries that share the same currency is expected to remain stable at the 2% set by the ECB, which was already reached last June.