Spain’s inflation rate reached a 21-month high of 3.4 percent in March, primarily driven by a significant increase in fuel prices linked to the ongoing conflict in the Middle East. According to revised data from the National Statistics Institute (INE), transport costs rose by 5.3 percent year-on-year, largely due to higher prices for fuel and lubricants used in personal vehicles. This inflation figure, the highest recorded since June 2024, also reflected notable increases in housing, clothing, and footwear prices.
The surge in inflation followed Iran’s closure of the Strait of Hormuz, a vital global shipping route for oil, gas, and fertilizers. This closure occurred after military strikes by the US and Israel on February 28, which escalated tensions in the region. In response to the rising costs, Spain’s leftist government implemented measures worth €5 billion ($5.9 billion) to support households and businesses. These measures included tax cuts and direct subsidies aimed at protecting the most affected sectors from the economic repercussions.
The sharp rise in energy costs has reignited concerns about inflationary pressures throughout Europe. Policymakers are closely monitoring the situation for further developments in the Middle East that could potentially disrupt global energy supplies.
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