Decrease in consumer prices rate recorded at 1.9% during May.
Spain's inflation rate decreased in May, according to the national statistics institute INE. The harmonized consumer price index (HCPI), calculated for European comparison purposes, dropped to 1.9 percent, lower than the forecasted decline to 2.0 percent by experts surveyed by Reuters. The April inflation rate was 2.2 percent.
The Eurozone's fourth-largest economy's data is included in the calculation of consumer prices for the entire euro area, which will be released on Tuesday. Economists predict the inflation rate to fall to 2.1 percent in May from 2.2 percent in April, bringing the European Central Bank (ECB) closer to its target of 2.0 percent inflation. An expected eighth rate cut may result in the deposit rate, serving as the key interest rate, falling from the current 2.25 percent to 2.00 percent.
Although specific data on Spain's contribution to the Eurozone's inflation rate is not available, the inflation rate in the Eurozone stands at 2.2 percent as of April 2025. The rate is driven by services, food, alcohol, and tobacco, non-energy industrial goods, and a drop in energy prices. Core inflation, excluding food and energy, has risen to 2.7 percent, indicating a potentially stable or slightly increasing trend.
Regardless, the Eurozone's inflation is expected to remain around 2.2 percent in the short term, with potential fluctuations based on energy prices and other factors. The ECB will announce its key interest rate decision next Thursday.
In an effort to meet the ECB's target of 2.0 percent inflation, the Eurozone's fourth-largest economy, Spain, might implement community policy focusing on areas such as vocational training to stimulate economic growth and lower the inflation rate. The Spanish government could also allocate finance towards sectors driving the Eurozone's inflation rate, like services and non-energy industrial goods, to maintain a stable trend and accommodate potential fluctuations based on energy prices and other factors.
