Inflation does not breathe. After a surprisingly good month of June, the annual variation rate of the CPI increased again and stood at that of the summer season. The underlying, a reference to know the variations in the shopping basket of Spaniards, increased three tenths to 6.2%.
The INE attributes the price rises to the higher cost of fuels, which have registered increases throughout the month compared to the decreases recorded last year at this point; to a smaller decrease in the prices of textiles and footwear in the middle of the sales season, and to the rise in the prices of tourist packages. Conversely, during this month gas and electricity supplies have fallen. In monthly terms, the General CPI rises one tenth.
GDP grows less than expected
At the same time, the Spanish economy softens its economic growth, reducing its growth from 4.2% year-on-year registered in the first quarter to 1.8% in the second. GDP grew 0.4% compared to 0.6% in the first three months, affected by the drop in exports and the drop in business volumes from agriculture. This rate is one tenth lower than that initially estimated by the Government.
National demand remains very strong and improves its contribution to GDP growth by one tenth, up to 1.5 points. However, external demand fell, contributing the remaining 0.3 points to growth, 2.5 less than the previous quarter. It does so motivated by the drop in exports of goods and services, which, although they grew by 0.7% compared to last year, are 9.5 points less than in the previous quarter, whose year-on-year data was highly inflated as it coincided with the last waves of the pandemic.
The drop in spending by non-residents in Spanish territory, which fell 17.7 points (from 33.6% to 15.9%), does not help GDP. Consumption remains strong and is 1.4% higher than last year, although inflation has taken its toll on the pocket of Spaniards between April and June and falls two tenths compared to the first quarter, especially in households, where it falls 1.2 hits . On the contrary are the public administrations, which increased their consumption by 2.3 points compared to the previous quarter and 3.8% compared to last year.
Nor do they stop the investment plans of the companies, which in the case of fixed assets grew one point compared to the previous quarter and 1.8% more than last year at this point. It does so supported by the acquisition of machinery, capital goods and weapons systems, which recovers 3.1 points although it is still below last year’s data (-2.8% real compared to -5.9% of the previous quarter). On the contrary, investment in homes, buildings and constructions falls five tenths, to 4.4%, due to the increase in the cost of credit that threatens to stop the brick.
In a first assessment from the Government, the Minister for Economic Affairs Nadia Calviño highlighted the “solid growth” of the Spanish economy during the first quarter of the year “despite the complex international context of economic slowdown and rising interest rates”. In a comment sent by her team, the first vice president of the Government also predicts a “progressive security” of prices in the environment of 2% for the general CPI and 6% for the core.
