CSN News reports that in Spain, inflation dropped to 2.3% from 0.7% in February. This is very close to the European Central Bank target.

Monday, 31 March 20, 25 at 12:23

The Spanish inflation rate has dropped for the first since October 20, 2024. According to data released by Spain’s INE National Statistics Institute, the consumer price index (CPI), which measures prices, fell seven tenths a point to 2.3% in March, close to the ECB target of 2% for Spain.

This drop to 2.3%, from 3% in February, is mainly because of lower electricity bills as a result from greater energy generation through renewables. Especially wind and hydroelectricity. In January and February, electricity bills rose due to the IVA sales tax going from 10% to 21% on 1 January. This was after the anti-crisis price package ended.

According to the latest press release from the Ministry of Economy, Madrid, however, the heavy rainfall and strong winds that swept across Spain in March led to a fall in energy prices due to an increase in renewable energy production. The CPI has now halted its five-month streak of increases, and it is at its lowest level in October.

In terms of renewable energy, March was a split month. On 13 March, the average electricity price was 111.73 euro/MWh. After the 14th day, with still heavy rains, but more wind, the price was normalised at an average of 51 euros/MWh. The decrease in price is 53.7%. This new scenario brings low or even negative prices for the main hours of the morning. But these times are still not completely free, as the fixed costs for system adjustments and the standing charges will still be added.

Due to the fact that March was the wettest month since 1961, and Spanish reservoirs are at 70% capacity, electricity prices have slowed down their upward trend. This decrease is more noticeable if you compare it to the average prices for the first 2 months of 2025. They were 96.69 Euros/MWh and 108.31 Euros/MWh respectively.

Prices of eggs are skyrocketing

The INE’s inflation data does not break down the price increases and decreases by individual items, but the Spanish consumer organisation OCU published a report warning of the dramatic rise in the egg prices. The price of this staple food in the Mediterranean diet rose by 24% last month, due in part to supply issues in other countries caused by avian influenza.

According to the calculations of their team, a dozen egg prices in Spanish supermarkets rose from 2,14 to 2,65 euros. According to OCU’s analysis, other staples continued to increase in price during March. These included onions (13% higher than last year), oranges (11%), green peppers (+7%), salad tomatoes, minced beef, and yoghurt, all of which increased by 5%.

Easter Effect

The rate of inflation, which is based on the stablest elements of our purchases, and does not include volatile prices for energy or fresh foods, fell another two tenths in March, to 2%. This was the lowest rate since more than three year.

The core inflation rate was the lowest it had been since December 2021. This was just before the onset the inflationary crisis that followed the outbreak of pandemics and the beginning of the Ukrainian War, which sent prices skyrocketing not only in Spain, but also across the EU and in the United States.

Electricity is not the only factor that has contributed to the decrease in inflation rate for March, compared with a year earlier. Fuels are one of the items that have risen less in this month’s price than they did in March 2024, according to INE. This time, it will be interesting for us to see the impact of Easter week since last year’s holiday fell in March and caused a rise in some travel and tour package prices.

Rains can dampen consumption

The storms are good for reducing electricity bills, but have had a negative effect on consumption. It slowed again in the third weeks of March. Caixabank released data this Friday that showed consumption growth of only 1.7% – 3.2% lower than February. The analysts explain that the slowdown in commerce in March, particularly in the face to face sector, is due to adverse weather conditions as well as the calendar effect of Easter in 2024, which will occur in March.

This month’s number is due mainly to a decline in face-toface trade. It was down by 1.3% (4.2 points less in February), and a slowdown in the growth of ecommerce to 5.4% (4.3% less in February).