EuroWire, MADRID: Spain’s annual inflation rate eased to 2.9 percent in December, marking its second consecutive monthly decline and reaching the lowest level in four months, according to preliminary data released by the National Statistics Institute (INE) on Tuesday. The figure was slightly above market forecasts of 2.8 percent but indicated a continued deceleration in consumer price growth after a period of relative stability through the final quarter of the year. The slowdown in headline inflation was largely driven by a fall in fuel and lubricant prices for personal vehicles, reversing the increase seen in December 2024. The decline in transport-related costs was a key factor in the easing of overall consumer price pressures. Inflation within leisure and cultural services also moderated, with prices rising at a slower pace than a year earlier.
In contrast, food and non-alcoholic beverage prices remained elevated, continuing to exert upward pressure on overall inflation. According to INE, the category recorded a sharper annual increase than in the same month last year, reflecting the sustained impact of high costs in food production and distribution. Price pressures in essential goods have been slower to moderate compared with other components of the consumer basket, maintaining their influence on household spending. Core inflation, which excludes volatile components such as energy and unprocessed food, held steady at 2.6 percent in December, unchanged from November. The figure represents the highest core inflation rate recorded in Spain over the past year, suggesting underlying price growth in services and industrial goods remains resilient. Despite the monthly stability, core inflation continues to track below the peaks seen during 2023, when the eurozone faced broader inflationary challenges stemming from energy supply disruptions and elevated commodity costs.
Food prices remain key driver of consumer inflation
The December data confirmed that Spain’s inflation trend has continued to moderate throughout 2025, in line with broader movements across the euro area. Earlier in the year, inflation rates fluctuated between 3.2 and 3.4 percent, before easing in the final months as global energy markets stabilized and the impact of earlier price shocks diminished. The transport sector’s contribution to inflation has lessened significantly over recent months, offsetting lingering strength in food and service prices. Energy inflation, which was a major driver of consumer price increases in 2022 and 2023, showed continued moderation during the final quarter of 2025. The decline in fuel costs and stable electricity prices provided relief to both households and businesses. Meanwhile, prices in sectors linked to leisure, culture, and communications showed subdued growth compared with last year, indicating that consumer demand has remained steady but not overheated.
Spain’s inflation path aligns with eurozone developments
Spain’s inflation rate remains below the eurozone average, reflecting the country’s relatively lower dependence on imported energy and early adjustments in its domestic pricing structure. The gradual easing of inflationary pressures supports expectations of a more balanced price environment heading into 2026. However, final confirmation of December’s data will be issued by INE in mid-January, following standard statistical revisions. Throughout 2025, Spain’s economic performance has been shaped by stable employment levels, moderate wage growth, and resilient domestic consumption. The continued moderation in inflation is expected to contribute to improved purchasing power among households, although food and housing costs remain key components of overall consumer spending. The government’s fiscal measures, including temporary tax adjustments on essential goods and energy products earlier in the year, have also influenced the trajectory of consumer prices.
The inflation trend in Spain aligns with the broader euro area’s gradual return toward pre-pandemic price levels. Other major economies in the region have reported similar patterns of easing inflation driven by lower energy costs and the normalization of global supply chains. As Spain enters 2026, attention remains on maintaining price stability while sustaining economic growth in a context of steady domestic demand and stable external trade conditions. Spain’s final consumer price index data for December will provide a clearer indication of the pace at which inflation pressures are receding. The latest figures reinforce the view that headline inflation has reached a more moderate range, supported by lower fuel prices and slower increases in several key consumption categories.