Spain’s government is attempting to combat surging inflation by unleashing more fiscal spending measures, this time to the tune of $10.6 billion.
With much of Europe facing an unprecedented spike in the cost of living thanks to pandemic-related dovish monetary policies exacerbated by the conflict in the Ukraine, some governments are embarking on damage control by handing out more of what caused the problem in the first place: money.
Earlier this week, Spain announced another 10 billion euro spending package aimed at easing inflation, marking the third such set of measures since the beginning of 2022, and bringing total government aid to 45 billion euros. The package is comprised of a one-time 200-euro payment to approximately 4.2 million households with incomes below 27,000 euros, as well as an extension of an energy subsidy to help Spaniards pay their utility bills into the first half of 2023.
The Spanish government’s move follows similar subsidies unveiled earlier this year, including price controls on rental housing, tax cuts, soft loans, and direct aid to households. Meanwhile, inflation in Spain has eased moderately, thanks to a recent drop in electricity prices. Preliminary data from the county’s statistics office shows Spain’s consumer prices rose 5.8% in December, a modest slowdown from the 6.8% year-over-year increase reported in the month before.
Information for this briefing was found via Reuters and the Spanish Statistical Office. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
Choke Points: The War on Inflation is Getting Pretty Selective
Inflation is too high, so central banks are raising interest rates to try and bring...