Inflation of essential goods skyrockets, it is much higher than the CPI

“I can’t take it anymore”. Robin Zander.

With the final inflation data, Spain is the country with the highest Okun misery index in the European Union, 20.7%, well above Greece. Much more inflation than the countries around us and much more unemployment, and that the unemployed affiliates and plaintiffs are not counted in the unemployment rate.

The sharp rise in inflation, to 6.5% in December, is not a coincidence. It is a policy. What is behind this huge rise? The irresponsibility of having overheated the economy with a massive and misnamed monetary stimulus, increasing the money mass well above the real demand for money when there was no liquidity problem, only a forced closure due to a health emergency.

Citizens must know that prices don’t all rise at the same time by chance. It is for allocating much more money to the same amount of goods and services, triggering current public spending. When it is done in a coordinated and simultaneous way between the main economies, the effect is destruction of purchasing power of wages and savings and worsening of competitiveness.

Prices rise on average, according to the CPI, by 6.5%. Salaries will increase less than 2%. Real wages between 2020 and 2021 will lose at least 3% real purchasing power. It is not little, minimum of 600 euros for median salary.

In addition, the Government has refused to adjust inflation in IRPF (Income Tax), as it should, leading to a covert tax increase.

The Government has refused to adjust inflation in personal income tax, leading to a hidden tax increase

Who are the most affected by inflation? The middle and lower classes and SMEs. Middle and lower class workers lose the purchasing power of their salary, they lose the value of their savings since most of them have deposits and, furthermore, the rise in prices is greater for them because the consumption basket includes less technology and leisure, which are the factors that reduce the CPI.

But the most serious thing about inflation is that it is much higher than that reflected in the CPI. It is not because the CPI is poorly calculated, but because it does not reflect the prices of financial and real estate assets and the prices including taxes. The huge asset inflation created by monetary policy During the years in which they told us that there was no inflation, it also makes it more difficult to acquire a home, for example.

Real inflation for non-replaceable goods and services is much higher, close to 8-10%. Let’s see why:

The housing has risen 23.3%, triggered by the increase in the price of electricity (the one that the government says has not risen).

The services that the INE (National Institute of Statistics) identifies as ‘Covid-19’, that is, the basket of essential services that have been consumed the most during the pandemic, have risen by 17.7%. Goods, 3.9%.

Unprocessed food and energy products rose 24.7%. Fresh foods rise 6.5% on average, but within that average there is a range that goes from 25% to 4%.

Fresh fruit rose 9%, oil 24%, legumes and vegetables 8%.

Heating and lighting 46%.

Transportation rises 10.9%. The energy products rise 40.2%, and fuels and fuels rose by 24.0%.

In other words, everything that is irreplaceable and essential rises well above the CPI, and the index moderates thanks to the drop in services and discontinued and occasional consumer goods.

Everything that is irreplaceable and essential rises well above the CPI

Using the same “system” that Podemos and PSOE used to say that the rise in the “real” cost of living in Rajoy’s time was “unaffordable” it is more than triple now.

They don’t say it anymore because they benefit by plundering taxes without adjusting for inflation.

What is surprising -note the irony- is that those of Podemos and PSOE who said in 2015 that prices were skyrocketing and that “you are very expensive for the Spanish” (Pedro Sánchez, Congress, February 24, 2015), today say What if you hear rain?

This enormous destruction of purchasing power is also much higher than the average for the European Union. The CPI in the euro zone is 5% in December and only Lithuania, Estonia and Latvia have higher rates than Spain. Inflation in Greece is 4.4%, in Italy 4.2% and in Portugal it is less than 3%.

Spain suffers from inflation and tax increases, leading consumers to a dead end. Loss of wealth, purchasing power and competitiveness.

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