The so-called ‘Iberian exception’ placed Spain last year as the only country in the OECD, the organization that brings together the most developed economies in the world, in which energy prices fell. 5.7%, being the fifth lowest among the 38 members that make up the club.
Only Switzerland (2.8%), Japan (4%), South Korea (5%) and Israel (5.3%) registered an annual CPI rate lower than the national rate at the end of the last financial year. Between December 2021 and last December, energy prices fell by 6.9% in Spain. In the same period, the increase was 18.4% in the OECD countries as a whole and 25.5% in the Eurozone and the European Union, the two regions most affected by their dependence on Russian hydrocarbons.
If the data from neighboring Portugal is taken as a reference, where energy prices increased by 20.8% in the same period despite the gas cap also worsening, it can be seen how this does not fully explain the fall in energy prices in Spain . The weight of renewables (wind power was the first source of electricity generation in January with a contribution of 31.5% of the total) and the diversification of energy sources would also be behind this evolution.
The Organization for Economic Cooperation and Development has published the inflation figures for the year as a whole on Tuesday. Prices rose on average among its members by 9.4% in December, so they moderated for the second consecutive month from the ceiling of 10.8% that they marked in October and registered their lowest level since April.
Spain and the reform of the European electricity market
The data from the OECD have been made public in a context in which the Spanish government sent its proposal for a comprehensive reform of the European electricity market to Brussels, and in which the Commission itself launched a public consultation on its own text in the middle of last month . This incorporates the review of the wholesale market and welcomes the implementation of tools that encourage long-term contracts to thereby lower bills.
The Twenty-seven move quickly to try to ensure their energy security for the coming winter. The International Energy Agency (IEA) has already warned that the current year will be “very difficult” for the European Union in terms of natural gas supply, facing a potential deficit of almost 30,000 million cubic meters with the collapse of imports from Russia and the more than foreseeable increase in demand from China.
The pressure remains on the price of food
The tensions gradually dissipated in the Spanish case in relation to energy prices, but the same did not happen with food prices, which rose by 15.7% at the end of December, four tenths more than the previous month and at the highest rate since the inflation statistics are made in Spain. Specifically, the evolution of processed foods is worrying, which has been driving core inflation up to a maximum of 7.5% in January, according to data advanced last week by the National Institute of Statistics (INE).
The increase in food prices in December was one tenth higher in Spain than the organization’s average, where it ended with a rise of 15.6%. As revealed by the INE just a few weeks ago, the greatest increases occurred in sugar (+50.6%); oils and fats (+38.1%); milk (+37.2%); eggs (+29.8%) or dairy products (+23.4%). A situation different from that of Spain is the one experienced in this sense by Israel (4.2%), Korea (5.2%) or Japan (7.2%), the countries where these basic products became less expensive throughout of the last year.
The Government opened in January a VAT on basic foods that has begun to be transferred to the shopping cart and that will allow the inflation rate to be reduced by moderating. Specifically, it has abolished that of products that already have the reduced rate of 4% and the VAT on oils, including olive oil, and pasta has been lowered from 10% to 5%. The First Vice President and Minister of Economic Affairs, Nadia Calviño, expects core inflation to peak throughout this quarter and then begin to moderate.