Inflation in Spain has risen to 3% in February, marking a 0.1% increase from January, according to the latest data from the National Institute of Statistics (INE).

This rise represents the fifth consecutive monthly increase since September, when inflation hit a low of 1.5%.

The increase is primarily attributed to rising electricity prices and the reinstatement of the Value Added Tax (VAT) on electricity to its original rate in early 2023 as temporary measures implemented during the inflation crisis have been phased out.

Despite the recent increase, current inflation figures remain significantly below the rates observed at the beginning of last year, which hovered around 7%.

In contrast, core inflation, which excludes volatile items like energy and fresh food, has continued its downward trend, decreasing by two-tenths to settle at 2.2%.

This figure marks the lowest level since December 2021. Economists suggest that while the decrease in core inflation is slow, it indicates stability without immediate negative implications.

Analysts from Funcas estimate that core inflation may stabilize between 2% and 2.3% for the remainder of the year.

A significant factor contributing to this stability is the services sector, where rising wages have placed upward pressure on inflation.

February also saw a notable decrease in olive oil prices, which have fallen by 32.3% over the last year.

Monthly data indicates an 8.7% drop from January, representing the largest monthly decline in the product’s price since records began.

Despite this reduction, the price of olive oil has surged by 97.1% since January 2021.

Conversely, tourism-related services have contributed to the overall inflation rate, with their monthly increase responsible for a 0.7% impact on February’s inflation compared to January.

Fuel prices, although rising, have exerted less pressure on inflation than in prior months, increasing by only 0.3%—a decrease of one percentage point from January and two points compared to February 2023.

The housing sector's inflation rate rose by two percentage points in February to 9.8%, driven by increased electricity prices.

In the transportation sector, however, inflation dropped by one percentage point to 0.3%, impacted by lower fuel and lubricant prices for personal vehicles.

Food and non-alcoholic beverage prices saw an increase in their annual inflation rate by four-tenths to 2.2%.

However, economists view this increase as reflective of market volatility rather than a sustained trend in rising food prices.

The Ministry of Economy, Trade and Industry noted that the rise in inflation during February can be mainly attributed to the increase in electricity costs.

The ministry also highlighted the decline in core inflation to its lowest point in over three years.

Despite uncertainties in the international economic landscape, Spain has been noted to maintain the highest growth rate among major economies in the Eurozone, compatible with moderated prices and increasing citizens' purchasing power.

In January, key factors behind inflationary pressures included rising gasoline and electricity prices, with the reintroduction of the 21% VAT on electricity contributing to inflationary effects.

The monthly increase from January to February was registered at 0.4%, marking five consecutive months of positive monthly inflation rates.

The last recorded decline occurred in September, with a notable minimum annual inflation rate of 1.5% that has been gradually rising since then.

Forecasts suggest that, if oil prices remain stable around $70 per barrel and the euro maintains its exchange value, inflation could average around 2.5% by year-end.