Inflation ends the year with a slight moderation compared to 2024

BarcelonaThe cost of living in Spain moderated in December thanks to lower fuel prices, according to preliminary data from the Consumer Price Index (CPI, the indicator that measures price changes) released Tuesday by the National Statistics Institute (INE). As a result, inflation across the country ended the year slightly below the projected growth rate for 2024.

Specifically, prices for consumer goods and services have increased by 2.9% this month in Spain compared to the same month last year, one tenth less than the annual growth recorded in NovemberCompared to the previous month, the cost of living rose by 0.3% in December, one-tenth of a percentage point higher than the previous month's rate. Fuel prices and, to a lesser extent, leisure product prices explain the slight drop in the CPI compared to a year ago. However, at the other end of the spectrum, food prices have risen at a faster rate than a year ago. The increase in food costs is typical in December, when there is an increase in demand and, consequently, in prices coinciding with the Christmas holidays. Thus, the annual inflation rate for 2025 has averaged 2.7%, a slight decrease of one-tenth of a percentage point compared to 2.8% in 2024. This figure remains above the 2% target set by the European Central Bank for the medium and long term. However, consumer goods and services prices continue their downward trend of recent years. Core inflation—which excludes volatile items such as energy and food—closed 2025 with an annual increase of 2.3%, six-tenths of a percentage point below the 2024 average. In December, it rose 2.6% compared to the same month of the previous year. This annual increase, however, is not the one used to calculate pension adjustments, which are based on November-to-November inflation. However, this year the figures matched, and contributory pensions will be increased by 2.7% starting January 1, 2026.

Requests for salary increases

This update allows pensioners to maintain their purchasing power, but it does not affect workers, since wages in Spain, despite having grown since the pandemic, have not kept pace with prices, resulting in a loss of purchasing power. This is why the UGT union has demanded in a statement that there be an "ambitious" wage increase starting next year. In this regard, the Spanish government has not yet finalized negotiations with social partners to agree on a new increase to the minimum wage (SMI), which the executive branch hopes to complete in the weeks following the New Year.

Since 2021, coinciding with the reactivation of economic activity after the outbreak of the pandemic, consumer prices have grown at a much faster rate than currently and also above previous years, when, following the 2008 financial crisis, inflation in the eurozone was very low for some years. The peak of price increases in the post-pandemic period occurred in the summer of 2022, when Russia's invasion of Ukraine triggered an energy crisis in Europe that sent the cost of living soaring. Since then, prices have continued to rise, but at an increasingly slower pace. However, household budgets have been particularly affected by the continued increase in food prices and, above all, housing, which has been a major concern for citizens for years. The latter case is special, since rent is included in the CPI, but home purchases are not, as they are considered an investment, not consumption.

The data published this Tuesday by the INE (National Statistics Institute) is provisional. The state statistical agency will publish its final figures, also broken down by autonomous communities, on January 15. It should also be noted that for much of this year Catalonia has maintained a slower rate of price growth than the national average, so the average rate in Catalonia is expected to be lower than that of Spain as a whole.