The consumer price index (CPI) in the Balearics for October was up 5.6% compared with October 2020. The latest figures from the National Statistics Institute point to the Balearics CPI rise being slightly above the national average of 5.4%. In both instances, it is the highest since the 1990s.
The rise in prices began in the second quarter of the year and has reached a new high in the run-up to the Christmas period. Consumer spending at one of the busiest times of the year is likely to therefore be impacted negatively.
An additional factor concerns salaries, pay agreements having meant that there was an average increase in salaries in the Balearics of 2.94% up to October. As this is a lower figure than the CPI, spending power will be affected.
Economist Antoni Riera, technical director of the public-private Fundació Impulsa, says that the increase in prices is closely linked to the basket of goods related to energy and oil, as well as to those that have been affected by disruptions in the supply chain. Imported products are that more expensive.
* The CPI isn't the inflation rate, but it is a key factor in determining inflation.