Canary Islands Witnesses Modest Price Rise in November, Retaining Spain’s Lowest Inflation Rate at 2.3%

In November, the Canary Islands experienced a modest uptick in prices, yet the region continues to enjoy the distinction of having the lowest inflation rate in Spain, recorded at 2.3%. This information was disclosed by the National Institute of Statistics (INE) on December 12, highlighting the unique economic landscape of the archipelago amidst fluctuating national trends.

Sector-Specific Price Movements

The overall price increase in the Canary Islands was quantified at two tenths of a percentage point. This slight rise was primarily driven by notable increases in the hospitality sector, which encompasses hotels, cafés, and restaurants. Prices in this sector surged by an impressive 5.4%. Additionally, housing costs also experienced a significant rise of 3.9%, while the prices of alcoholic beverages and tobacco saw an increase of 2.4%.

On a broader national scale, the Consumer Price Index (CPI) recorded a slight decline in its annual rate, dropping by one tenth to 3%. This decrease was largely attributed to falling electricity prices, marking a notable shift after two consecutive months of rising rates. October had reached a peak of 3.1%, the highest in 16 months, indicating a volatile energy market that has significant implications for overall inflation.

Food and Beverage Costs on the Rise

In November, the cost of food and non-alcoholic beverages saw an increase of four tenths, elevating the annual rate to 2.8%. This rise is the most significant since June and is influenced by price hikes in essential commodities such as oils and fats, as well as dairy products including milk, cheese, and eggs. The leisure and culture sector also contributed positively to the CPI, with its annual rate climbing over one point to 1.2%. This increase was attributed to a less severe decrease in holiday package prices compared to the previous year, reflecting a recovering tourism industry.

Yearly Price Trends and Core Inflation Insights

Over the past year, substantial price increases were noted across various categories. Waste collection services saw a staggering rise of 30.3%, while the price of eggs surged by 30.2%. Other notable increases included jewellery and costume jewellery at 29.6%, combined passenger transport at 26.7%, and beef prices, which rose by 18%. In contrast, prices for olive oil plummeted by an astonishing 38.1%, with other significant decreases observed in sugar, audiovisual equipment, and international flights.

Core inflation, which excludes unprocessed food and energy products, rose by one tenth in November, reaching 2.6%, marking the highest level since December 2024. The INE reported that the annual inflation rate, excluding recent tax changes, also stood at 2.6%, which is four tenths lower than the general inflation rate, indicating a divergence in price pressures across different sectors.

In terms of monthly changes, the CPI increased by 0.2% in November compared to October, a decrease from the previous month’s increase. The rise in prices was primarily driven by a 4% increase in clothing and footwear as winter approached, alongside a 0.5% rise in transport costs due to higher fuel prices. Food prices also saw a 0.3% increase, influenced by rising costs for dairy and meat products, further complicating the economic picture for consumers.

Despite the overall price increases, the hospitality sector experienced a slight decline of 0.5% in November, attributed to lower accommodation service prices. The most significant monthly price increases were recorded in eggs, which rose by 6.8%, and maritime passenger transport, which increased by 5.5%, reflecting the dynamic nature of the local economy.

Key points

• Canary Islands’ prices rose by two tenths in November, maintaining the lowest inflation rate in Spain at 2.3%.
• Hospitality sector prices increased by 5.4%, while housing costs rose by 3.9%.
• National CPI decreased to 3% in November, largely due to falling electricity prices.
• Food and non-alcoholic beverages saw a 2.8% increase, the highest since June.
• Core inflation reached 2.6%, the highest since December 2024.
• Significant yearly price increases included waste collection (+30.3%) and eggs (+30.2%).
• Olive oil prices dropped by 38.1% over the past year.