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Date Published: 15/11/2024

Spanish food prices spike following VAT increase

Just a month after Spain scrapped some of its tax discounts on groceries, prices are up by 1.4%

The Spanish government partially withdrew the VAT reduction on basic grocery items last month which has resulted in a significant increase in the price of staples on the supermarket shelves.

This hardly comes as a surprise but it’s certainly unwelcome, especially since consumers are already facing more expensive fuel and housing costs.

Compared to September, last month’s average grocery bill went up by 1.4%, not a staggering amount but still enough for shoppers to feel the pinch.

Despite the latest hike, general inflation only rose to 1.8%, according to the data of the Consumer Price Index (CPI) released on November 14.

This modest increase has been attributed to more expensive gas, electricity, petrol and diesel.

The monthly rise in food prices recorded in October is the sharpest increase in two consecutive months since February last year.

The impact of the VAT hike

On October 1, the tax on olive oil, milk, bread, eggs, cheese, fruit, vegetables, legumes, cereals and flour went from 0% to 2%, while the tax rate on pasta and seed oils rose from 5% to 7.5%.

Following these changes, the foods that have seen the most price increases in the last month were fresh fruit and vegetables, which became 7.8% and 6.9% more expensive, respectively, compared to September.

Hot on their heels are whole milk, cheese, breakfast cereals and rice, which rose by 1.6%. The price of skimmed milk shot up by 1.4% while today, flour and bread cost 1.2% and 0.7% more in the average supermarket.

The only glimmer of good news is with regard to the usually pocket-emptying olive oil, whose price increased by a relatively slight 0.1%.

Apart from the products affected by the tax change, the cost of sheep, goat and beef meat and fresh fish all rose by around 1.5%. However, frozen seafood fell in price by 0.4%, while potatoes and sugar fell by 2% and 3.5%, respectively.

You might be interested to know that over the last few months, the one item that has shot up the most in price is actually chocolate – since this time last year, everyone’s favourite sweet treat has become an incredible 21.2% pricier.

In other news: Spain mourns 224 victims of the October DANA floods, 9 of whom were children

Image: Pixabay/INE

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