Spanish food costs aren’t reflecting the recent plunge in inflation — maintaining pressure on Prime Minister Pedro Sanchez as he struggles to muster support before snap elections this month.
The squeeze on shoppers is evident in Bloomberg’s monthly Paella Index, which jumped by 14.5% from a year earlier in June, despite overall gains in consumer prices sinking below 2%.
The advance in the gauge, which crunches data from the National Statistics Institute, exceeded last month’s 14% increase, ticking up after two months of easing. The rising cost of the classic Spanish rice dish is outstripping food prices in general, though they’re still growing by more than 10%.
The government is already touting headline inflation that, at 1.6%, is not only among the lowest in the European Union but is also beneath the European Central Bank’s 2% target. With Sanchez trailing in polls before the July 23 vote and Spaniards not yet seeing their grocery bills stabilizing, though, that achievement may not be enough to revive the incumbent’s fortunes.
Driving up the price of paella are soaring costs for olive oil — up 31% from a year ago, and rice — up 21.9%. The smallest increase came for fresh or refrigerated fish, which gained 3%.
Spain’s main opposition leader, Alberto Nunez Feijoo, pounced on such trends during a televised debate this week, countering Sanchez’s lauding of the latest inflation figures by zeroing in on food.
And the premier, too, appears to understand that the battle against surging prices isn’t over, extending an anti-inflation package of €3.8 billion ($4.2 billion) in tax cuts and subsidies last month.
