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Spain Inflation Unexpectedly Accelerated in January on Higher Fuel Prices

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By Xavier Fontdegloria

Spain’s inflation unexpectedly edged up in January, breaking a string of five consecutive months of falls, due to higher gasoline prices as the government’s fuel subsidies were scaled back.

Consumer prices rose 5.8% in January on year by European Union-harmonized standards, accelerating from a 5.5% increase in December, preliminary data from the Spanish statistics office INE showed Monday.

The reading is well above the 4.9% consensus forecast from economists polled by The Wall Street Journal.

Measured by national standards, inflation also quickened to 5.8% in January from 5.7% a month earlier. Higher prices for gasoline compared with the same month a year earlier drove the increase, which was partially offset by declines in electricity prices, INE said.

Core inflation–which exclude the more volatile categories of food and energy–rose to 7.5% in January from 7.0% in December.

The Spanish economy expanded 0.2% in 2022’s fourth quarter, showing more resilience than previously anticipated, but there were signs that still-high inflation and rising interest rates took a toll at year-end despite government support and lower energy prices.

Write to Xavier Fontdegloria at [email protected]

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