The Spanish government has announced a number of new measures to tackle persistently high inflation. For example, VAT will be reduced on many foods and support measures for energy bills will be extended. The total package is worth ten billion euros, Prime Minister Sánchez announced this morning.
The Spanish government is preparing the measures after the blow that the country has received as a result of the war in Ukraine. Since the Russian invasion, consumer prices have increased by almost eleven percent, food prices have increased by an average of fifteen percent. In response, the VAT on bread, milk, cheese, fruit and vegetables will go from four percent to zero, the VAT on olive oil and pasta will go from ten to five percent.
Families with an annual income of less than €27,000 can count on a supplement of €200. According to the government, this is a group of more than four million people. At the same time, the general discount on fuel will be abolished, saving the State over six billion euros. Instead, there will be targeted support for the transport and agriculture sectors.
Spain currently has one of the lowest inflation rates in the Eurozone. The average is 6.7%, compared to over 11% in the EU according to harmonized European data.
According to Prime Minister Sánchez, Spain’s economy is in good shape, the Prime Minister predicts five percent economic growth compared to 2022. However, the Spanish Central Bank still expects prices to rise in the coming years.
Source: BNR
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