“We knew that the effect of the gas cuts of (Russian President, Vladimir) Putin was going to be transferred to the evolution of prices in the life of our country”said the president of the Spanish government, the socialist Pedro Sánchez, who recognized that the inflation data “are bad.”
Sánchez was referring to the impact of the Russian invasion in Ukraine, and more particularly, to the sharp reduction in imports of Russian gas to European countries as a consequence.
Spain has been facing for months, like many countries in the world, an increase in inflation due to the tensions caused by the recovery of the economy after the restrictions imposed by covid-19 and the war in Ukraine.
Inflation: a “gravity” situation
To try to contain the rise in prices, the government of Pedro Sánchez adopted in March a plan of direct aid for 6,000 million euros (US $ 6,320 million) for homes and companies, focused mainly on the price of energy, which was extended until the end of the year. Last Saturday, the government announced a new direct aid plan of 9,000 million euros (US$9,460 million).
The measures include a direct aid of 200 euros for independent workers and the unemployed and a reduction in VAT on electricity – for the second time in less than a year – from 10% to 5%.
The inflation data for June “demonstrates the seriousness of the situation and the suitability of the measures we are taking,” Sánchez said on Wednesday.
“Prices have been rising for more than a year and the data for June confirms the failure of the government’s erratic policies“, criticized Alberto Núñez Feijóo, leader of the main opposition formation, the Popular Party (PP, right), on Twitter.
In June, the harmonized consumer price index (IPCA), which allows comparisons with other countries in the euro zone, stood at 10% at the interannual rate, according to the INE in its statement.
Core inflation – which excludes energy prices and discounts seasonal variations – also advanced and reached 5.5%, that is, its highest level since August 1993.
Source: Ambito
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