Spain | Inflation picked up sharply in March and is set to rise further in April

Summary

Headline inflation in Spain accelerated to 3.4% YoY in March, driven by energy and, to a lesser extent, by services and industrial goods. In fact, core inflation rose unexpectedly to 2.9%. BBVA Research estimates that headline inflation could rise to 3.6% or 3.7% in April.

Key points

• Key points:
• The 1.1 percentage point increase in headline inflation in March aligned with forecasts, reaching 3.4% YoY.
• Core inflation surprised to the upside with a 0.2 point increase to 2.9%, driven by services (3.7%) and non-energy industrial goods (1.6%).
• Spain's harmonized inflation differential with respect to the EMU stood at 0.9 percentage points, exceeding the historical average of 0.3%.
• For April, headline inflation is estimated to rise to the 3.6%-3.7% range, while core inflation could moderate to 2.7%-2.8% due to the base effect of Easter.

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