Spain’s inflation rate rose to a 21-month high of 3.4 per cent in March, driven by a sharp increase in fuel prices linked to the Middle East conflict. Revised data from the National Statistics Institute (INE) showed transport costs climbing 5.3 per cent year-on-year, mainly due to higher prices for fuel and lubricants for personal vehicles.
The inflation figure, the highest since June 2024, also reflected increases in housing, clothing, and footwear prices. The rise came after Iran closed the Strait of Hormuz—a critical global shipping route for oil, gas, and fertilisers—following US-Israeli military strikes that escalated tensions in the region on 28 February.
Spain’s leftist government responded by introducing measures worth €5 billion ($5.9 billion) to support households and businesses. These included tax cuts and direct subsidies aimed at shielding the hardest-hit sectors from the economic fallout.
The spike in energy costs has reignited concerns over inflationary pressures across Europe, with policymakers watching closely for further developments in the Middle East that could disrupt global energy supplies.
