The moderation in the price of gasoline this month has partially offset the growing cost of electricity, food and tourist prices
“We are already on a downward path,” Calviño interprets, although he asks for “prudence” due to the “high uncertainty”
The inflation granted a respite in the month of August. This month the consumer price index (CPI) recorded a monthly variation of 0.1%, below the five tenths that it rose in August 2021, which has allowed the inflation rate to relax to 10.4%, four tenths below the figure for July , when the annual rise in prices reached 10.8%, the most intense since September 1984. According to the advance data of the CPI for August published this Tuesday by the Statistics National Institute (INE), the slight drop in fuel prices in August compared to July has partially offset the persistent rise in electricity, food, restaurant and tourist package prices, allowing for the first inflection in inflation since last April.
The data advanced this Tuesday by the INE are provisional until September 13, when the body publishes the definitive CPI statistics for August.
If the more volatile prices of energy and unprocessed food are discounted, the so-called core inflation stood at 6.4% in August, the highest rate since January 1993, compared to 6.1% in July.
Calvino’s satisfaction
Inflation reached 10.8% in July, reaching its highest rate since September 1984, despite lower gasoline prices. Electricity, gas, food, tourism and some more timid summer sales than in the past year took the CPI for the month of July to its highest level since 1984. The peaks of inflation have been registered in the months of March (9.8 %), when Putin started the war, and in June and July, when Russia cut gas supplies to Europe. From the Government’s point of view, the slowdown in inflation in August coincides with the implementation of the Executive’s packages of measures, which would demonstrate the effectiveness of the measures adopted, as stressed by the First Vice President and Minister of Economy, Nadia Calvinoin the program ‘La hora de la 1’, on RTVE.
The vice president has trusted that the drop in the inflation rate in August is the beginning of the path that, according to the forecasts of analysts and the European Central Bank, should lead to the rise in prices in Spain and in the euro zone ” a more moderate levels next year. The vice-president has trusted that the change announced by the European Commission in the design of the electricity market –following the model of the cap on the gas price of the ‘Iberian exception’, in Spain and Portugal– will contribute to the moderation of inflation . “We are a year late, but better late than never,” she added, alluding to the insistence with which the Spanish government has defended in recent months a change in the electricity model that the EU has resisted until now. . She has also referred to the imposition of a cap on the price of CO2 emission rights at the European level, as an additional measure “to deal with Putin’s blackmail” of Europe through energy. “Little by little, the way is being opened to stop the price of gas in international markets,” she added.
salary debate
Calviño has placed the fight against inflation as the priority objective of the Government’s economic policy, in which he has included the adoption of measures to support the most disadvantaged families and groups affected by the rise in prices.
In this sense, he has advocated raising the interprofessional minimum wage (SMI), in line with the Government’s commitment to place it at 60% of the average Spanish salary in 2023, but has said that it is unaware that Yolanda Díaz’s Ministry of Labor has a proposal to bring the SMI to 1,078 euros next year. The Government – Calviño recalled – is waiting to hear the proposal of the commission of experts created to advise on SMI matters.
Calviño has also stressed that the current context of inflation requires “an improvement in wages in the economy as a wholehow could it be otherwise” and has relied on the “responsibility” of the social agents to reach an agreement for the coming years that will help eliminate some uncertainties in the Spanish economy.
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In particular, when talking about the negotiation between the Government and unions on the salary increase for public employees in 2023, the vice president said: “We are going to try to find an increase that allows us to protect the income of public employees, but contain the inflation spiral. From her point of view “the moderation of wages and business margins is key to avoiding an inflationary spiral”, hence her insistence on the need for an income pact between employers, unions and the Government.
Faced with the declarations of the second vice president and Minister of Labor, Yolanda Díaz, of explicit support for the union mobilizations against what -in his opinion- is the employer’s blockade of the negotiation of salary improvements, Calviño has called for “face these months with temperancedespite the uncertainty.