Food soars 15% although inflation moderates to 6.8% due to electricity

J.Lusa

The CPI for November falls for the fourth consecutive month, despite an underlying rate of 6.3% due to a shopping basket that is 830 euros more expensive than a year ago

edurne martinez

Inflation continues to drop tenths for another month. The CPI for November stands at 6.8%, half a point less than the previous month, its lowest figure since January (6.1%), before the war in Ukraine broke out and energy and food prices fell. shoot. The data confirmed this Wednesday by the INE indicate that prices are today four points lower than in July, when the rate reached its maximum peak (10.8%) since September 1984.

The National Institute of Statistics assures that this drop in the CPI is due to the moderation in fuel and electricity prices compared to the significant increases of a year ago. In fact, the data indicates that energy products are down 4.6% since October and have even cut 1.5% so far this year. Compared to the prices of November 2021, energy has risen by 4.5%.

The question now is how to reduce underlying inflation, which does not take energy or fresh products into account, and which already stands at 6.3%, only five tenths below the general rate. Experts indicate that this is a big problem for the economy, since the underlying is more difficult to lower and it can become chronic. Food has risen 15.3% in one year.

The foods that have risen the most in price since November 2021 are sugar, which has skyrocketed by 50.2%, oil (31.5%), milk (31%), eggs (27%), cereals (23%) and potatoes (21.5%). These data come in the middle of the Government debate on how to cushion the price of basic foodstuffs in the shopping basket with caps or limitations. Although these ideas are losing steam as warnings about the negative side effects that such a measure would have are accentuated. On the one hand, the Second Vice President and Minister of Labor, Yolanda Díaz, has spoken of "acting, as in the case of energy, so that prices are controlled", and even the Minister of Agriculture, Luis Planas, now sees "logical » legislate «as has been done in other sectors».

But given these data, the OCU asked the Government to temporarily eliminate VAT on healthy staple foods, such as fruits, vegetables, legumes, rice, pasta, meat, fish, milk, eggs or bread. In a statement, the consumer association calculates that the increase in the price of food up to 15.3% represents an annual extra cost of 830 euros in the shopping cart.

For this reason, it also requests the increase in the personal and family minimums of the taxpayer in personal income tax and the "urgent" activation of food checks for the most vulnerable families, especially those with dependent children.

The First Vice President of the Government, Nadia Calviño, congratulated herself from Gran Canaria for the inflation data by assuring that the CPI in Spain has dropped "four points in four months", which demonstrates, in her opinion, the effectiveness of the measures put in place launched by the Government to support the most vulnerable groups and "guarantee a fair distribution of the cost of the war".

That is why he assured that the Executive is studying how to focus the new measures that they will approve before the end of the year. Among them, although the Government resisted approving measures to lower the price of food, it will now include aid, of which it has not yet given details, considering them "essential necessities that directly affect the most vulnerable groups."

In monthly terms (November over October), inflation fell by 0.1%, compared to increases of 0.3% in the previous month and a year earlier. It must be taken into account that the monthly CPI rate was not negative in a month of November since 2018.

Pensions will rise 8.5%

With this data from November, the increase in contributory pensions for 2023 is calculated, which will increase by 8.5%, as the Government already estimated in its Budgets. The pension reform law takes into account as a reference the twelve-month average interannual CPI, from December of the previous year to November of the current year. Social Security will have to disburse an extra 12,750 million euros to raise pensions by this percentage.

Non-contributory pensions will rise almost double, 15%, an increase that was applied to them last July due to an amendment agreed between the Government and Bildu in the budget negotiations. For its part, the Minimum Vital Income (IMV) of 2023 will also rise according to the CPI average of the last twelve months, 8.5%.

This inflation data shows that large companies are "taking advantage" to raise their profit margins, driving a "spiral of prices to all-time highs and impoverishing the workforce as a whole." This is how UGT valued the data for November, which although it moderates in the general rate, warns of the escalation of the underlying. In addition, they indicated that the moderation of the CPI is due to the gas cap measures, for which they demanded that the Government implement others that regulate and penalize the "speculative dynamics" of these companies.