Spain's annual inflation rate eased for the second consecutive month to 2.2% in April 2025, marking the softest reading in six months and aligning with the preliminary estimate, according to data from the National Statistics Institute.
Spain inflation rate confirmed at six-month low
The moderation in headline inflation was primarily attributed to a significant slowdown in price increases for housing and utilities, which decelerated to 4.2% from 5.7% in March. This reflected easing pressures in key components such as electricity, where inflation slowed to 10.6% from 12.8%, and gas prices, which reversed sharply into negative territory at -3.2% from an 8.4% increase the month prior.
Additionally, transportation prices continued to weigh on overall inflation, declining by 1.6% year-on-year compared to a 0.9% fall in March, largely due to lower fuel costs for personal vehicles amid subdued global oil prices and lingering weakness in demand. Meanwhile, price pressures also eased across several other categories, including alcoholic beverages and tobacco (2.6% vs 3.1%) and food and non-alcoholic beverages (2% vs 2.4%), with the latter partly driven by a more pronounced drop in oils and fats, where prices plunged by 34.1% following a 30.3% decline in March. The ongoing correction in this segment reflects both favorable base effects and improved global supply conditions.
Core inflation figures
However, stripping out volatile components such as energy and unprocessed food, the core inflation rate was confirmed at 2.4% in April, up from 2% in the previous month. The firming in core inflation suggests that underlying price pressures in services and other non-energy goods remain relatively sticky, keeping the European Central Bank's policymakers cautious in their forward guidance despite the recent moderation in headline inflation.
On a monthly basis, consumer prices rose by 0.6% in April, accelerating from a 0.1% gain in March, reflecting seasonal factors such as increased travel and leisure activity during the Easter holidays, alongside pass-through effects from still-elevated input costs in certain sectors. In harmonised terms, using the EU’s methodology, Spain’s CPI also rose by 2.2% year-on-year and 0.6% month-on-month, both in line with earlier estimates and consistent with the broader eurozone inflation trajectory.
Potential outlook
Looking ahead, analysts expect Spain’s inflation to hover around current levels in the near term, as easing energy prices and improved food supply chains continue to offset persistent service-sector inflation and labor cost pressures. Nonetheless, the strengthening of core inflation warrants attention, particularly as wage negotiations and service price adjustments in the tourism-heavy summer season could keep the core rate elevated, complicating the policy outlook for both the Bank of Spain and the ECB.
