Ronnyone

Inflation in spain month of May was 3.2%!. That's good compared to most countries.

spainrico

Yes, Spain is doing very well in comparison to other EU (and UK) countries.

But the news just saying food prices will rise again after the Ukraine dam disaster.

Ronnyone

Yep food is 12 % higher than this time last year. Good news is that the government will keep the food discounts on essentials running but after election if PP win they will no doubt scrap every decent economic thing Sanchez has done because they see it as communist policy- and replace it with the usual market economy where everything is fine if you are rich!!

rbs_gb

Uy what short memories! Don't forget that in January the INE changed the basket of products for the IPC with the effect that overnight the inflation rate went down about 2% in Spain. If you look at the "inflacion subyacente" on the INE web site then inflation is 6.1% for May

In the UK wage inflation could be doing expats with UK investment opportunities a big favour. There is expected to be another rise in the interest rates on Thursday, and with the pound continuing to strengthen against the euro, it's a good time to have investments there and live here!

Lynn R

Yes, they changed it to include free market tariffs for domestic energy (a year later than they had previously announced they would be doing this).

El INE cambia con un año de retraso cómo mide el precio de la luz y el gas | El Periódico de España (epe.es)

Changing the basket of goods used to calculate the rate of inflation is something the ONS often does in the UK, in fact it is reviewed annually.

Consumer price inflation, updating weights - Office for National Statistics

Ronnyone

I think the point is that Spain has done very well in its fight against inflation compared to other countries and that this helps people who dont have much in life.

Moses2013

To be honest it's all a joke when you really look at how inflation is measured. Even if inflation in Germany is higher than Spain, this doesn't mean that there are less bargains or ways to save money.
It's often the opposite and supermarkets have inflation offers and people buy different products than they would have bought last year. This means that the products that aren't sold are eventually sold cheaper.

https://www.ecb.europa.eu/stats/macroeconomic_and_sectoral/hicp/html/index.en.html
Basket of goods and services

In practice, prices cannot be collected for all of the millions of different goods and services available in the euro area. Sampling is used to derive a representative basket of goods and services to be priced every month. The national statistical institutes are responsible for defining the precise basket by selecting the most representative items for each product category. Therefore, each national HICP will cover bread and cars, but the type of bread and the brand and model of car may differ across countries, reflecting national consumption habits. Nowadays prices can also be obtained directly from retailers using supermarket scanners. However, in these cases the process of obtaining valid and representative price indices can be challenging.

bobd22

As Moses says they can't do a simple straightforward comparison. People shop every week or so and tend to purchase a similar basket each time, they notice any increase in what it costs. Governments just tend to play it down and invent reasons for price increase. Personal experience is best measure.

Lynn R

I think so too. It amazes me how little prices in Spain for some things change over the years. My water bills have never changed in the 17 years I have lived here. We have been with the same broadband supplier for at least 10 years and the price has gone up only once, by €1 per month although the speed has increased from the original 30mbps to 300 mbps (no CPI + 3% mid contract price rises here). IBI rarely changes, following a revision of catastral values about 15 years ago mine would have gone up, but the Ayuntamiento came up with a scheme to compensate property owners for 90% of the increase and I got a discount of 40% of the total bill for the next 9 years until I sold the property. Last year the IBI bill went down by 3% and it is due to do the same again this year, should have done next year too but control of the Ayuntamiento has now passed to the PP so who knows. My dentist still charges exactly the same as he did when I first became a patient about 8 years ago.

rbs_gb

Totally agree, inflation is a headline number and just a guide that politicians love to use, and when the politicians can change it is as reliable as a chocolate teapot. Personal experience tells you the real story in your own life.

Moses2013

I thought this was quite interesting, although US: https://www.brookings.edu/blog/up-fr...ure-inflation/
The BLS uses a survey of American families called the Consumer Expenditures Survey to determine which items go in the basket and how much weight to assign to each item. Different prices are weighted according to how important they are to the average consumer. For instance, Americans spend more on chicken than tofu, so changes in the price of chicken have a greater impact on the CPI.

So chicken hos a greater weight in the US than Tofu, but would be interesting to know what has a greater weight in Spain. I could only find main categories
https://www.euro-area-statistics.org...b.html?lang=en
Countries also have different general income levels. This may have an indirect impact on inflation through different consumption patterns. In some countries, for example, a higher percentage of spending is for food, which tends to have higher inflation rates. This then leads to an overall higher inflation rate in those countries, as food has a high “weight” in their shopping baskets.

As you say, personal experience is better than anything else.

Lynn R

This report from 2021 makes it clear that the INE does use relative weightings in their calculation of the inflation rate.

Principales características del IPC base 2021 (ine.es)

In all countries people have a "personal inflation rate" which is what they base their perception of inflation on. Increases in the essentials such as food and utility bills always impact the poorest the most, because they spend a greater proportion of their income on those.

Las desigualdades en el impacto de la inflación en 2022, compensadas por la electricidad - Center for Economic Policy - EsadeEcPol

Moses2013

Yes, but it doesn't show how the weighting affects the rates and what is actually in the basket.
As a result of these adjustments, the base 2021 CPI shopping basket now consists of
955 items (of which 462 are traditionally collected and the rest are collected by means of
scanner data), compared to 977 in the previous base (with 480 items collected traditionally).
https://www.euro-area-statistics.org...b.html?lang=en


Vs, Germany as an example:

Lynn R

I noticed this morning in Mercadona that there has been another big increase in the price of olive oil - undoubtedly due to the drought and poor harvests. Virgin olive oil is now €7.70 a litre and extra virgin €8.50. The extra virgin was €6.60 last time we bought some, about 2 weeks ago, so a big jump. Lots of other things will be increasing as well because of weather conditions both in Spain and further afield.

spainrico

Yes, Lynn the price of olive oil has gone crazy - so I was delighted this morning when a quality bottle of olive oil (and not a horrible little plastic box) was placed on the table this morning with my tostada con tomate in the club Nautico in Villajoyosa this morning. Pity none of the boats moored in the little marina are mine!