Spain’s consumer inflation accelerated to 3.3% in March, up from 2.3% in February, driven mainly by higher fuel and lubricant prices linked to the Iran conflict. The preliminary data from the National Statistics Institute marks Spain’s fastest price growth since 2024 and adds pressure ahead of the eurozone’s wider inflation reading.
Inflation Accelerates on Fuel and Lubricant Costs
Spain’s National Statistics Institute reported that headline CPI rose to 3.3% year‑on‑year, with the increase driven primarily by higher fuel prices as the Iran war pushed up global oil costs. Electricity prices were lower than a year earlier, but the decline was smaller than in 2025, limiting the offsetting effect. Core inflation remained unchanged at 2.7%, indicating that the surge is concentrated in energy‑related categories.
Energy Shock Reverses Recent Disinflation Trend
Fuel prices in Spain have fluctuated sharply since hostilities escalated. Petrol rose from €1.48 per litre on 28 February to around €1.78 before easing back to €1.56, according to government figures. This volatility has fed into transport and food prices, raising concerns about renewed pressure on household budgets as global energy markets remain unsettled.
Government Deploys Support Measures
Prime Minister Pedro Sánchez’s cabinet approved a €5‑billion emergency package on 20 March to shield households and businesses from the Iran war’s economic effects. The plan includes VAT reductions on energy bills, direct fuel support and targeted aid for vulnerable groups. Analysts warn that while these measures may soften the blow, they cannot fully offset external shocks.
Monthly Prices Also Rise More Than in February
Consumer prices increased 1.0% month‑on‑month, six‑tenths of a percentage point more than in February. The harmonised EU index climbed 1.5%, underscoring the strength of the March rebound. The figures highlight how quickly global energy shocks are feeding into Spain’s domestic price environment.
ECB Watches Closely Ahead of Eurozone Inflation Data
The Spanish data arrives days before the eurozone’s first March inflation reading. ECB President Christine Lagarde warned that markets may be “overly optimistic” about the conflict’s economic impact, signalling caution as policymakers assess the energy‑driven spike. Investors are watching whether the ECB adjusts its stance as geopolitical risks intensify.
Spain’s inflation path now depends heavily on global energy markets and the duration of the Iran conflict. A prolonged disruption could keep inflation above 3% for months, according to the Bank of Spain’s latest projections.
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