Cost of living in Spain: Food inflation sits at 5.3%

Food price inflation in Spain is settling down, with the rate of price rises having halved since 2022 – but remains well above the European Union average, according to the latest figures.

At present, the Eurozone average food price inflation sits at 2.6%, based upon numbers for February, the most recent full month. Only Malta, at 6.8%, Greece at 6.7% and Croatia at 5.6% are reporting higher inflation for groceries than Spain, whose 5.3% is the fourth-highest in the EU.

Inflation impact on Spain came later than on its neighbours

But it's not all negative: At the start of the global inflation crisis, Spain's consumer price index showed rises of above 10% in the cost of groceries. Also, Spain took longer than many of the EU's other large economies to register inflation rates of concern.

Spain has also avoided the dramatic fluctuations seen elsewhere in the Eurozone, where absolute inflation in some countries rose to over 10% or even over 12%, compared with between 3% and 5% for Spain.

Whilst the sharpest Eurozone interest rate rise in history has brought inflation down dramatically in most large economies, Spain's started to increase at around this time, meaning the effects had apparently come later.

The country's self-reliance in terms of gas supplies, with almost no dependency on Russian pipelines and its above-averagely high use of renewable energies – specifically solar - have meant domestic fuel price inflation and its knock-on effects have been less pronounced since the conflict in Ukraine began.

Which food has gone up the most in price?

Greatest hikes are seen in meat and fish. Pork and ham shows price inflation of 11%, the second-highest in the EU, whilst fresh fish registers 7.5%, the fifth-highest level of inflation in the bloc. But many other basic foodstuffs have gone up in price at a higher rate than elsewhere in the EU, including milk, cheese, eggs, fruit, vegetables, juices, and 'ready meals'.

Price hikes for essentials such as milk began to cause grave concern. Between 2021 and 2023, the cost of a basic supermarket own-branded litre of milk rose from 58 cents to 95 cents, and has since settled at 85 cents, or 47% more expensive in barely three years.

A government move to cut value-added tax (IVA) on many staple products from 4% to zero has helped contain spiralling prices, although the impact has not been great in the grand scheme of things when totting up the cost of the weekly shop.

All this said, Spain's food-price inflation has been heavily skewed upwards by soaring costs of one key ingredient that is, arguably, far more abundantly used on the Mediterranean than in more northerly European nations: Olive oil.

In the past year, olive oil has rocketed in price by an astounding 67% in Spain – the greatest rise in the EU. Overall, olive oil has risen in price by an average of 50% across the bloc since February 2021, but Spain has seen hikes of 191% in that time.

Food-price inflation in Spain now 68% lower than last year

Some relief is on its way, though, even if not in olive oil prices: As at February 2024, grocery price inflation was 68% lower than it was in February 2023, and will hopefully continue this trend – even though other major Eurozone economies have reported greater drops in food inflation.

In real terms, Spain's increases in the cost of grocery shopping have not greatly differed from the rest of the EU since the inflation crisis began. Spanish consumers now pay around 29.7% more for their food and drink than they did three years ago, close to an EU average of 29.4%.

How much more does it cost to live in Spain these days?

Inflation in general in the Eurozone is now drawing much closer to the European Central Bank's (BCE's) 2% target: The average across the common currency area is 2.6%, whilst Spain's is 2.9%.

And Spain's cost-of-living crisis has not hit as hard as in most of the rest of the EU. Now, outgoings for food, fuel, housing and other basics mean residents are having to spend 17.4% more than they did in February 2021, whilst the bloc's average is 20.1%.