Spain’s core inflation rate was unchanged in March as unprecedented tax increases in the nation’s democratic history sustained prices while deepening a recession that has pushed unemployment above 26 percent.
Core inflation, which excludes energy and fresh-food prices, was 2.3 percent last month, the same rate as in February, the National Statistics Institute in Madrid said today. That’s more than the 2.2 percent median of three forecasts in a Bloomberg survey. Underlying prices rose 0.6 percent from the previous month.
Prime Minister Mariano Rajoy called this week on other European Union governments to take measures to boost growth as he seeks more time to cut a budget deficit of about 10 percent of gross domestic product. The recession in Spain deepened last year. It is the euro area’s fourth-largest economy’s second since 2008.
The European Central Bank left its benchmark interest rate on hold last week as policy makers weighed stimulus options.
Darty Plc said last week that it is closing its loss-making electronic appliances stores in Spain as it prepares to leave the country. Retail sales fell 7.9 percent in February from a year ago after households’ savings declined to 12.7 percent of their income in the fourth quarter from 16.2 percent a year earlier. General Motors Co.’s roughly 6,000 employees at its Zaragoza plant in northern Spain this week accepted a two-year salary freeze after new car registrations fell 13.9 percent last month.
Spain’s headline inflation rate, based on European Union calculations, was 2.6 percent, in line with a preliminary estimate on March 27. Economists predict it’ll slow to 1.3 percent in the last quarter of this year from 2.4 percent in the second quarter.