Spanish CPI YoY flash actual at 1.9% (forecast 2.1%, previous 2.2%)

Spanish CPI YoY flash actual at 1.9% (forecast 2.1%, previous 2.2%)

Spanish consumer prices increased by 1.9% year-over-year (YoY) in May, according to flash estimates released on Tuesday. This figure is a notable decrease from the previous month's 2.2% and is also below the forecasted 2.1% [1].

The Spanish CPI (Consumer Price Index) has shown a steady decline in recent months, with the latest data indicating a significant drop in inflation. This trend is largely attributed to the cooling of energy prices and a moderation in core inflation. However, it is important to note that food prices have been increasing, which could potentially offset the positive effects of lower energy costs in the future.

The ECB (European Central Bank) will closely monitor these developments, as Spain is one of the major eurozone economies. The recent decline in inflation across the eurozone, including France and Germany, has opened the door to further interest rate cuts. The ECB is expected to lower its key rate by another quarter point to 2% on June 5, following the French inflation data that showed a significant drop in May [1].

Economists are divided on the future trajectory of inflation in Spain. While some predict that energy prices will continue to rise, potentially reversing the current downward trend, others remain optimistic that the ECB's policy of rate cuts will keep inflation in check. The European Commission forecasts inflation in Spain to average at 0.9% this year, before edging up to 1.2% in 2026 [1].

In conclusion, the latest Spanish CPI data suggests a cooling of inflation, which aligns with the broader trend in the eurozone. While the immediate outlook appears promising, the long-term effects of energy and food price dynamics remain uncertain. Investors and financial professionals should closely follow these developments as the ECB prepares to make its next policy decision.

References:
[1] https://www.marketscreener.com/quote/currency/EURO-US-DOLLAR-EUR-USD-4591/news/French-Inflation-Declines-Clearing-Way-for-ECB-Rate-Cut-2nd-Update-50072712/