{"id":32118,"date":"2022-08-24T21:00:00","date_gmt":"2022-08-24T19:00:00","guid":{"rendered":"https:\/\/www.11onze.cat\/?p=32118"},"modified":"2022-08-04T10:42:40","modified_gmt":"2022-08-04T08:42:40","slug":"inflation-weighs-household-consumption","status":"publish","type":"post","link":"https:\/\/www.11onze.cat\/en\/magazine\/inflation-weighs-household-consumption\/","title":{"rendered":"Inflation weighs on household consumption"},"content":{"rendered":"<div class=\"component text\">\n  <div class=\"container\">\n\n\n    <div class=\"row\">\n      <div class=\"col  col-lg-8  offset-lg-2\">\n        <h3><b>Spain seems to be one step ahead of Europe in terms of inflation. Prices have risen earlier and more sharply, with the result that household consumption has suffered more. But it only seems a matter of time before Europe also tightens its belt.<\/b><\/h3>\n<p>&nbsp;<\/p>\n<p><b>The Spanish economy is showing signs of stagnation<\/b><span style=\"font-weight: 400;\">. Spanish GDP grew by only 0.3% in the first quarter of 2022, according to <\/span><a href=\"https:\/\/www.ine.es\/daco\/daco42\/daco4214\/cntr0122a.pdf\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">INE<\/span><\/a><span style=\"font-weight: 400;\"> data. To a large extent, this meagre increase is due to the <\/span><b>contraction of household consumption<\/b><span style=\"font-weight: 400;\"> by 3.7%, the first negative rate in household consumption in the last year.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">After a fall in GDP of almost 11% in 2020 due to the pandemic, a strong economic recovery was expected as restrictions were lifted, but <\/span><b>growth in 2021 was limited to a modest 5.1% and early data for 2022 does not invite optimism<\/b><span style=\"font-weight: 400;\">: most international organisations, banks and analyst firms are already revising down their growth forecasts for this year.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Despite the recovery of the labour market, <\/span><b>uncertainty has taken its toll on domestic consumption<\/b><span style=\"font-weight: 400;\">. As a result, macroeconomic data has not taken off at any point.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><b>The burden of inflation<\/b><\/h3>\n<p><span style=\"font-weight: 400;\">These doubts about the future of the economy have been compounded in the last year by a much more tangible element: <\/span><a href=\"https:\/\/www.ine.es\/prensa\/ipc_tabla.htm\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">inflation<\/span><\/a><span style=\"font-weight: 400;\">. The pandemic caused prices to be contained in 2020, which ended with a 0.5% decline in the CPI. However, <\/span><b>since March 2021 prices have risen sharply and almost uninterruptedly<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The largest increase occurred in March this year. <\/span><b>In just one month, prices shot up by 3%<\/b><span style=\"font-weight: 400;\">, bringing the year-on-year rate to 9.8%, the highest since the mid-1980s. And although the inflationary trend has moderated slightly in April, at 8.3%, it is still at a rate that discourages consumption.<\/span><\/p>\n<p><b>Energy is mainly responsible for these inflation levels<\/b><span style=\"font-weight: 400;\">. It should be borne in mind that the price of electricity has risen by around 80% in one year, and fuels by more than 50%. These increases are much higher than in other European countries, especially in the case of electricity.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><b>Risk of European contagion<\/b><\/h3>\n<p><b>Europe runs the risk of following in Spain&#8217;s footsteps in terms of consumption contraction<\/b><span style=\"font-weight: 400;\">, as the inflationary gap is narrowing. While the difference between Spanish inflation and the European Union average at the end of <\/span><a href=\"https:\/\/es.statista.com\/estadisticas\/495544\/tasa-de-inflacion-interanual-en-los-paises-de-la-ue\/\" target=\"_blank\" rel=\"noopener\"><span style=\"font-weight: 400;\">2021<\/span><\/a><span style=\"font-weight: 400;\"> was 1.3%, in April it narrowed to 0.9%. Europe is no stranger to rising energy prices, which are already 40% higher than a year ago.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">While inflation seems to have peaked in Spain, it is likely to continue rising in countries such as Germany, France and Italy, something that would make the recovery of the major European economies even more difficult.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">We should not forget that <\/span><b>economic stagnation is already a widespread phenomenon in <\/b><a href=\"https:\/\/ec.europa.eu\/eurostat\/documents\/2995521\/14497760\/2-29042022-BP-EN.pdf\/b2bac77e-f630-a6cd-4190-5e891a85331b\" target=\"_blank\" rel=\"noopener\"><b>Europe<\/b><\/a><span style=\"font-weight: 400;\">. In the first quarter of the year the eurozone&#8217;s GDP grew by only 0.2% and France, one of the locomotives of the European Union, surprised with a flat GDP.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The situation may become even more complicated as <\/span><b>the European Central Bank is expected to raise the price of money in July<\/b><span style=\"font-weight: 400;\">. This measure, aimed at curbing inflation, will further cool the economy, so that Europe seems doomed to tighten its belt.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><b>If you want to wash your clothes without polluting the planet, 11Onze Recommends <\/b><a href=\"https:\/\/www.11onze.cat\/en\/?page_id=31744\" target=\"_blank\" rel=\"noopener\"><b>Natulim<\/b><\/a><b>.<\/b><\/p>\n\n      <\/div>\n    <\/div>\n  <\/div>\n<\/div>\n\n\n<div class=\"component cards\">\n  <div class=\"container\">\n    <div class=\"row\">\n      <div class=\"col col-xl-8 offset-xl-2\">\n        <h1>If you liked this article, we recommend you read:<\/h1>\n        <div class=\"cards__wrapper\">\n          <div class=\"card\">\n            <a href=\"https:\/\/www.11onze.cat\/en\/magazine\/dictionary-inflation\/\" class=\"card-link\" target=\"_self\"><\/a>\n            <div class=\"card-img\">\n              <img decoding=\"async\" src=\"https:\/\/www.11onze.cat\/wp-content\/uploads\/2022\/05\/THUMBNAIL_FAMILIA_INFLACIO-1.jpg\" class=\"card-img-top\" alt=\"\">\n                <span class=\"card-category\">Finances<\/span>\n            <\/div>\n            <div class=\"card-body\">\n              <p class=\"card-title p2\"><strong>Dictionary of inflation<\/strong><\/p>\n              <span class=\"card-time\">1 min read<\/span>\n              <p class=\"card-text small\">Learn what the different concepts linked to the evolution of the Consumer Price Index<\/p>\n            <\/div>\n          <\/div>\n\n\n          <div class=\"card\">\n            <a href=\"https:\/\/www.11onze.cat\/en\/magazine\/inflation-grips-us-define-it\/\" class=\"card-link\" target=\"_self\"><\/a>\n            <div class=\"card-img\">\n              <img decoding=\"async\" src=\"https:\/\/www.11onze.cat\/wp-content\/uploads\/2022\/02\/THUMBNAIL_INFLACIO_ENEMIGA_NOSTRES_ESTALVIS-800x533.jpg\" class=\"card-img-top\" alt=\"\">\n                <span class=\"card-category\">Culture<\/span>\n            <\/div>\n            <div class=\"card-body\">\n              <p class=\"card-title p2\"><strong>The inflation that grips us<\/strong><\/p>\n              <span class=\"card-time\">2 min read<\/span>\n              <p class=\"card-text small\">Inflation is a word that has crept into our daily lives.<\/p>\n            <\/div>\n          <\/div>\n\n\n          <div class=\"card\">\n            <a href=\"https:\/\/www.11onze.cat\/en\/magazine\/inflation-devalues-bank-deposits\/\" class=\"card-link\" target=\"_self\"><\/a>\n            <div class=\"card-img\">\n              <img decoding=\"async\" src=\"https:\/\/www.11onze.cat\/wp-content\/uploads\/2022\/04\/THUMBNAIL_IPC.jpg\" class=\"card-img-top\" alt=\"\">\n                <span class=\"card-category\">Economy<\/span>\n            <\/div>\n            <div class=\"card-body\">\n              <p class=\"card-title p2\"><strong>Inflation devalues bank deposits<\/strong><\/p>\n              <span class=\"card-time\">3 min read<\/span>\n              <p class=\"card-text small\">The March CPI stood at 9.8%, the highest rate since 1985.<\/p>\n            <\/div>\n          <\/div>\n\n              <\/div>\n              <br>\n              <br>\n              <div class=\"cards__wrapper\">\n\n        <\/div>\n      <\/div>\n    <\/div>\n  <\/div>\n<\/div>","protected":false},"excerpt":{"rendered":"","protected":false},"author":71,"featured_media":32112,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","footnotes":""},"categories":[1],"tags":[172],"class_list":["post-32118","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-economy"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Inflation weighs on household consumption - 11Onze<\/title>\n<meta name=\"description\" content=\"Household consumption has fallen in Spain due to inflation and economic uncertainty. 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