FX.co ★ Spain Inflation Rate Slows More than Expected in May

Spain's annual inflation rate experienced a deceleration for the third consecutive month in May 2025, registering at 1.9%. This marks its lowest point in seven months and falls below market predictions of 2.1%, as indicated by preliminary estimates. The primary factor in this slowdown was a reduction in leisure and culture prices, which had seen an increase in May 2024. Additionally, there was a notable decrease in transportation prices compared to last year, and a more subdued rise in electricity prices contributed to the overall decline, albeit to a lesser extent. The core inflation rate, which excludes volatile items such as food and energy, decreased to 2.1% in May, down from April's three-month peak of 2.4%. On a month-to-month basis, consumer prices remained unchanged, following a 0.6% increase in April, and contrary to market forecasts of a 0.1% rise. Taking into account the EU-harmonised index, the Consumer Price Index (CPI) increased by 1.9% year-on-year, which is lower than the anticipated 2% by markets, and dropped 0.1% month-on-month, while analysts had expected no change.