Inflation in Spain hits 9.8%, highest rate in nearly 40 years

OVIEDO, Spain

The consumer price index in Spain climbed 9.8% in March compared to the same month last year, according to preliminary data released by Spain’s National Institute of Statistics on Wednesday.

That is the highest year-on-year spike since 1985.

“73% of the inflation can be explained by the runaway prices of energy and food staples, which have been exacerbated by the war in Ukraine,” Prime Minister Pedro Sanchez told the parliament on Wednesday.

Even before the war in Ukraine, Spain has been grappling with soaring prices. In February, inflation reached 7.6%.

On Tuesday, Bank of Spain Governor Pablo Hernandez de Cos called March’s inflation reading “particularly negative” and “a very significant uptick.”

He warned that markets are anticipating that inflation will persist and said the impact of the war on Ukraine will mean more than just rising food and energy prices.

“There’s been a brutal increase in uncertainty, and uncertainty isn’t good for making investment decisions or consumption,” he said.

Spain's core inflation, which does not consider price changes in volatile areas like food and energy, also hit 3.4% in March – the fastest annual spike since 2008.