The pressure that prices are exerting on the Spanish economy continues. Thus, the leading indicator of the CPI published this Friday by the National Institute of Statistics (INE), results in a rise of 6 tenths in July to reach an interannual rate of 10.8%, the highest rate in nearly 40 years , specifically since September 1984.
This evolution has been the consequence of the increase in the prices of food and non-alcoholic beverages, and electricity, together with the evolution of clothing and footwear.
However, the drop in fuel prices stands out, as a result of the certain moderation in the price of oil.
As for the core rate that excludes the most volatile items such as fresh food and energy products, it also rose by 6 tenths to 6.1% year-on-year, the highest rate since January 1993.
This evolution of prices, however, continues to be a heavy burden for the Spanish economy that has caused all economic revisions to be in line with reducing GDP growth estimates and upwards those of inflation until placing it on average above 8%.
Prices began to climb in Spain at the turn of the summer of 2021, mainly driven by the price of energy, with which the average annual CPI closed last year at 3.1% after having been negative in the year .
But what seemed like a very short-term increase whose effects would disappear in the spring, according to the first calculations by analysts, has turned into a real nightmare for the shopping basket, due to the effects of the war in Ukraine, which seems to be becoming chronic, accumulating already more than six months.
The tsunami to which the prices of the products in the shopping basket are being subjected is also taking a heavy toll on all citizens, which is reflected through a clear loss of purchasing power. With the same money you can buy fewer things. This fall in purchasing power is being felt especially in salary income and in the savings of families and companies.
A quantifiable approximation of the money that this impact of the inflationary escalation could have on said income, could be around 110,000 million euros reduction in purchasing power of wages and deposits, according to calculations made by this newspaper.
Precisely for this reason, since the beginning of the year, the Governor of the Bank of Spain launched the idea of the advisability of carrying out an income pact in order to prevent the rise in prices from being internalized in the economy as a whole, something that seems far from get.
At the beginning of July, after the failure between the social agents to reach this pact by way of agreements on salary moderation, the economic vice president called this negotiating table in which she asked moderation of margins and wages for a period of 3 yearsalthough he did promise to raise the Minimum Interprofessional Wage (SMI).
Recently a report by the Institute of Economic Studies indicated that labor costs would explain 83.4% of the increase in prices between 2019 and 2021.