By Jakub Olesiuk
(Reuters) – Spanish inflation rose to 2.6% year-on-year in August, boosted by higher fuel prices, preliminary data from the National Statistics Institute (INE) showed on Wednesday.
That was higher than the 2.3% rate in July, and in line with analysts’ average forecast in a Reuters poll.
Still, August consumer prices rose at a slower pace than a year earlier, when inflation was 10.5%, INE said.
Spain has had one of the lowest inflation rates in the euro zone after it peaked at 10.8% in July 2022 and retreated towards the European Central Bank’s 2% target.
Core inflation, which strips out volatile fresh food and energy prices, was 6.1% year-on-year, down from 6.2% in the year through July, the INE data showed.
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Spain’s European Union-harmonised 12-month inflation (HICP) was 2.4%, up from 2.1% in July and below the analysts’ average estimate of 2.5%.
Marc de Muizon, senior economist at Deutsche Bank Research, said his bank expects Spain’s HICP in 2024 to average 2.3% year-on-year and to fall below 2.0% in 2025. He added a move below 2% was unlikely in the near future in the absence of a “very large” negative shock on commodity prices”.
“I actually expect Spain inflation to go up again above 3.0% year-on-year in the last quarter of the year”, he said.
The Bank of Spain last Friday gave a less optimistic outlook for the euro zone, warning inflation in the bloc would remain above target for “an extended period of time”.
(Reporting by Jakub Olesiuk; Editing by Pietro Lombardi and Mark Potter)