Inflation data show great discrepancies among Spanish regions when calculating increases in basic living costs
How much does an Average Spaniard have to pay now compared to last summer just to keep treading water with basic living costs?
The national headline inflation rate is at a 38-year high of 10.8% in Spain. When we dig down into the INE data, we see housing and electricity inflation is running at 23%, transport at 16.3% and food at 13.5%, all more than the national headline rate. Things get even worse if we look at different Spanish regions and spending categories. After all, we might debate the national headline number but what we all understand is how much, or how relatively little, we have in our pockets or bank accounts. Let's imagine our Average Spaniard spends €100 a month on clothing, €200 on transport, €500 on food and €700 on rent and bills. Just last summer, this added up to €1,500 a month on basic items, or €18,000 in one year. What does the inflation data tell us has happened to the real money in his pocket (or bank account) and those basic items, over the past twelve months? How much does it cost now?
Let's start with the €100 a month on clothing. Maybe Average Spaniard buys a couple of new t-shirts, a new pair of trainers to go running, some pyjamas for the kids, a new dress for his wife. Not a lot each month but some little things just to keep wardrobes ticking over. Plugging in the INE numbers for clothing price increases around Spain, we see that in a couple of places (Extremadura, the Canary Islands), prices have fallen a tiny bit, in most places it looks like it's up about €5 and at the top-end clothing prices have increased more than 10% in Murcia, Ceuta and La Rioja. Another €5 or €10 or €15 on anything is not really noticeable in a monthly budget, if you're not paying much attention.
Now, Average Spaniard has to move around to get to work, take the kids to school, go to the supermarket, visit his parents, maybe a day at the beach or in the hills with friends, a few normal errands on some kind of transport, a car, a bus, a train, whatever it is in his particular situation in life. Let's say €200 a month for that. The INE inflation numbers say that cost has gone up at least €29, at least 14.5%, everywhere in Spain in the past twelve months. For some reason, transport inflation in the Spanish North African city of Melilla, which is only 12 square kilometres, it is up 19%. Do we notice another €30 a month on transport compared to a year ago?
What about the supermarket? Those few bags of normal food and household goods? Not restaurants or big nights out to party, just normal eating. If Average Spaniard was spending €500 at the store on food last year, it now costs at least €58 more a month everywhere in Spain. In Extremadura, Melilla and Murcia, it is now nearly €80 more expensive. So between a few t-shirts, moving around to get to work and eating, we are already up €100 a month compared to last summer, but we have to live somewhere, so let's look at rent or mortagages and electricity or water bills.
Perhaps that cost €700 a month last year. The INE data say this part of life costs more in every region of Spain by at least €114. In four regions—La Rioja, Navarra, Castilla y León and Castilla la Mancha—housing is over €200 more expensive than last summer. So by adding housing costs, we just doubled or tripled the total change: €100 plus €200 or €300, depending on where Average Spaniard lives. In total, the data say the cost of living for those four basic areas of life that everyone needs to try to take care of somehow, last year's €1,500 a month has turned into anywhere between €1,714 (the Canary Islands) and €1,852 (Castilla la Mancha). And if we multiply that by twelve months, the extra effort a person needs to make to stay afloat is now between €2,574 and €4,232.
Is that coming out of Average Spaniard's savings or has he stopped buying discretionary stuff, maybe cancelling Netflix or shifting to cheaper food brands at the store? Is that the end of the rainy-day savings or emergency cushion he had prepared? What about holidays or school books for the kids? What about Christmas? Inflation took it. And this is only if prices stop rising, if inflation suddenly goes to 0.0%, which is not likely at all with the current global economic outlook. Even if, as politicians would like to see, the rate of inflation starts to decline, from 11% to 9% or 6%, the monthly squeeze for Average Spaniard is only going to get worse over the next few months.
Subscribe now on Substack. Your €15/month guarantees this independent report