The consumer price index (CPI) stood at 3.1% year-on-year in October, one tenth higher than in September, mainly due to the rise in electricity prices, the highest rate in 16 months, since June 2024. According to the preliminary indicator produced by the National Statistics Institute (INE), along with electricity prices, which rose more than in October 2024, air and rail transport also increased.
These increases, according to the INE, were partly offset by the fall in petrol prices. October's rise means two consecutive months of increases in the annual inflation rate from 2.7% in August and the highest rate in almost a year and a half, since June 2024 when it stood at 3.4%.
According to this preliminary data, the estimated annual rate of change in core inflation, the general index excluding unprocessed food and energy products, also rose by one tenth of a percentage point to 2.5%. In monthly terms, consumer prices rose by 0.7% compared to September. This is the largest increase in this monthly rate since June this year. The Ministry of Economy has noted that the inflation figure for October is in line with last month's. As for the harmonised CPI, which allows for international comparisons, the HICP, in October the annual rate of change increased by two tenths to 3.2%. As of September 2025, the annual inflation rate for the Balearics was 3.3%. While the rate has fluctuated, it has generally remained higher than the Spanish national average during 2024 and 2025.
Inflation highlights and contributing factors
Housing and real estate
Continued price growth: Despite protests against mass tourism and rising costs, real estate prices have continued to rise in 2025. This is driven by high demand from both domestic and international buyers, who see property as a stable investment.
Increased rental costs: The average rental price in the Balearic Islands reached €18.09 per square meter in 2025, a 9% increase over the previous year. This puts an average 85 m² apartment at roughly €1,170 per month.
Tourism and hospitality
Higher prices: Throughout 2024 and 2025, the tourism and hospitality sector saw significant price increases. Hotels and restaurants were major contributors to inflation, with notable price jumps in 2024 and continued increases in 2025.
Shifting tourist spending: Some restaurants and tourism businesses reported lower spending by tourists in 2024 and parts of 2025, leading some to express concern about future seasons.
Cost of living for residents
Import costs: As an island, Mallorca relies heavily on imports for many goods. Higher transportation and importation costs have contributed to the rise in consumer prices.
Varied impact on spending: The inflation spike has had a wide-ranging effect on the local population. For example, some restaurant and nightlife establishments have adjusted their menus and hours to help absorb costs, while residents note higher prices for basics like food and utilities.
Spain and EU context
Higher than national average: Throughout much of 2025, the Balearic Islands' inflation rate was among the highest in Spain. For example, in June 2025, the Balearics' rate was 2.8%, compared to the national average of 2.3%.
European Central Bank policy: The European Central Bank (ECB) has been monitoring inflation trends. The upward trend in inflation seen in countries like Spain makes an interest rate cut seem unlikely in the near term.