Spain’s year-on-year inflation rate for December 2024 reached 2.8%, up from November’s 2.4%, as rising fuel and transport costs drove the increase.
The figure, confirmed by the National Statistics Institute (INE), aligns with analyst expectations and marks the highest inflation rate since July 2024. This also represents the third consecutive month of inflation growth.
The surge in December’s inflation is attributed to base effects and rebounding transport prices, which climbed 0.6% after a decline of 0.1% in November. Culture and recreation prices also rose significantly, increasing to 3.2% from 2% in the previous month, largely due to higher tourist package costs.
Core inflation, which excludes volatile energy and food prices, reached a four-month high of 2.6% in December, up from November’s 2.4%, consistent with market predictions. Month-on-month inflation also accelerated to 0.5%, exceeding the 0.4% estimate and November’s 0.2%.
Looking ahead, the European Commission projects that Spanish inflation will average 2.2% in 2025 and fall to 2% in 2026, aligning with the European Central Bank’s target. It anticipates Spain’s GDP growth will hit 2.3% in 2025, with a slight decline to 2.1% the following year.
CaixaBank shares a positive outlook, predicting robust economic growth in 2025 driven by increased private domestic demand. However, the bank cautions that escalating geopolitical risks, such as tariff conflicts between major economies or intensified Middle Eastern tensions, could dampen growth by pushing up energy prices.
