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Inflation in Spain - Statistics & Facts

Inflation is defined as a general increase in the prices of goods and services over a period of time, and implies the decline of purchasing power of a given currency. Yet, inflation is not necessarily a negative process; the European Central Bank aims at keeping inflation below, but close to, two percent. Whereas high inflation rates are a signal of an overheated economy and pose many risks, most economists agree that the impact of small levels of inflation is outweighed by the risk of deflation, that is, a negative interest rate.

The most commonly used inflation index is the Consumer Price Index (CPI). The CPI measures average price changes in a basket of representative goods and services. The Consumer Price Index takes a base year, which is assigned a value of 100, and compares the other prices against it. If the CPI is above 100 in a given year, it means that prices rose (inflation), whereas if it falls below 100, prices fell (deflation).

In Spain, the institution in charge of calculating the CPI is the National Statistics Institute (INE). According to this source, "the index is made based on 220,000 prices of 479 items, belonging to groups that range from clothing to transport and housing".

When the average consumer price index is broken down into groups, it can be seen that, with the exception of recreation and culture, prices increased across all categories in 2021, but particularly for transport, as well as housing, water, electricity and other fuels. Such growth was to be expected since the annual average of the CPI in Spain showed a remarkable upward trend in recent decades. Such positive development is predicted to continue in the future. Even though how badly the coronavirus pandemic affected the country’s economy in 2020, the inflation rate still remained positive in 2021.

Although the CPI is the most frequently used indicator for inflation, several other indices provide insight into changes in price levels in an economy over time. One of them is the Producer Price Index (PPI), which measures price fluctuations of manufactured and sold products in the national market during the first step of commercialization. As of 2021, Asturias was the Spanish region with the highest PPI, when the index stood at 141.27 points. In a comparison of sectors, the electricity, gas, steam and air conditioning supply registered the highest PPI in Spain in that same year.

Interesting statistics

In the following 5 chapters, you will quickly find the 31 most important statistics relating to "Inflation in Spain".

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