According to the latest news from Spanish media, in the first half of this year, the price crisis in the EU is worsening month by month and is far from being resolved. The inflation rate in March was 9.8%, which was thought to be the peak. However, recent data has once again cont

The latest news from Spanish media is that in the first half of this year, the price crisis of EU is getting worse month by month and is far from being resolved. The inflation rate in March was 9.8%, which was thought to be the peak. However, recent data has once again contradicted the forecast.

Spain’s National Statistics Institute (INE) reported on Wednesday that html consumer prices in June rose 10.2% year-on-year, an increase of 1.5 percentage points from the May data and a record high. As of June this year, prices in 2022 have increased by an average of 8.9%, and if changes between November 2021 are taken into account, this number will drop to 8.2%.

In addition, this is the first time since April 1985 that the inflation rate has exceeded the double-digit mark. The Bank of Spain had predicted in April that this might happen and would continue into the summer. The strong price increases recorded last year are expected to mechanically ease year-on-year inflation after July, but all the intense uncertainty surrounding the economic forecast prevents us from being certain of anything.

What started as a brief surge in inflation in the post-pandemic era has turned into the largest price shock in nearly four decades. Most analysts still believe inflation will return to manageable levels next year, but there is growing uncertainty surrounding the issue.

Nadia Calvinho, the government’s first vice-president and minister of economic affairs, warned last week that the government was already looking at “new scenarios of higher inflation lasting longer at the international level.” The EU's embargo on Russian oil and the increasingly frequent natural gas production cuts between Russia and other European countries herald a harsh autumn and winter, and the possibility of energy production restrictions in Europe due to supply shortages is increasing.

Amid this high inflation situation, the government decided to extend the measures of the shock plan to try to mitigate the economic impact of the war in Ukraine for the rest of the year. A decree extending and deepening electricity tax cuts extends the 20-cent fuel cut and includes new measures such as public transport discounts or 200-euro checks for the unemployed and low-income self-employed people.