Food prices moderated in June for the fourth consecutive month, but they are still at a high level, above 10% in June, specifically at 10.3%. It represents a reduction of more than one and a half points compared to the previous month, and it is the lowest rate since April 2022, and this is the good news. The one that is not so much is that they have been increasing at double-digit rates for 15 months.
Particularly noteworthy in this price moderation is the drop in the prices of legumes and vegetables, which increased in June last year, and also the fact that fruit, bread and cereals have increased less than then. In addition, the stability of milk, cheese and eggs also has an influence compared to the increase of the previous year.
Conversely, the biggest price increases between June of this year and 2022 are those of sugar (44.9%), olive oil (31%), potatoes (27.8%), rice ( 21.9%) and canned fruit (21.7%
In this way, the trend of food prices is confirmed by stopping its increase from the peak of 16.7% reached in February, but it is a gradual and slow process, which continues to punish consumers’ pockets when they visit the supermarket .
This is the reason why two weeks ago the Government extended the VAT reduction on foods considered basic, and will maintain it until the end of the year, unless underlying inflation falls below 5.5%.
The data published this morning by the INE confirms the 1.9% inflation advanced two weeks ago, which means falling below 2%, the reference figure of the European Central Bank (ECB) in terms of inflation, for the first time in two years. Since the spring of 2021, it has not been below this level, that is, since the period before the start of the current inflationary crisis, first initiated by the recovery from the pandemic and subsequently greatly aggravated by the energy prices triggered by the war. from Ukraine.
This represents a drop of 1.3 points in the year-on-year CPI compared to the month of May and the reduction is due both to the moderation in the increase in the price of food, as well as that of fuel and electricity. The statistical effect also plays an important role, since the interannual data is obtained by comparing the rate for this month with that of June last year, at a time when prices were skyrocketing due to the war. Since April 2021, the escalation of prices has skyrocketed until reaching its maximum in the summer of last year and since then, a moderation has begun that has finally led to this 1.9% in June.
For its part, core inflation, which does not take into account energy or fresh food, has moderated for the third consecutive month, reaching 5.9%, two tenths less than in May. This less volatile inflation, which shows deeper trends, always takes longer to rise, but it also takes longer to moderate, as is being seen in this period.
From the Ministry of Economy they emphasize that Spain is the first major economy in the euro zone to reduce inflation below 2% and registers the lowest rate for more than two years. They also add that “this positive evolution confirms the effectiveness of the main measures to reduce taxes and discounts”.
