The Bank of Spain warns about rising prices compared to the rest of Europe: “It could gradually erode the competitiveness of the Spanish economy.”

In September, Spain experienced a notable increase in consumer prices, with the general Consumer Price Index (IPC) reaching 4.9% year-on-year, the highest level since February 2023. Food and non-alcoholic beverage costs remain a primary driver of this inflationary pressure. Concurrently, the housing market has seen significant growth, with prices for new and used properties rising 14.2% in September compared to the previous year, marking a 14.9% increase over the first nine months of 2024. This housing appreciation significantly outpaces the general inflation rate by 8.8 percentage points.

The Bank of Spain has issued a formal warning regarding these trends, noting that price growth in Spain is currently 1.2 percentage points higher than the eurozone average. This represents the widest inflationary gap recorded since August 2022. The central bank cautions that if these price disparities persist relative to the rest of Europe, they could gradually erode the overall competitiveness of the Spanish economy.