Spanish inflation rose to its highest rate in 13 years in March, compounding competitiveness problems for an economy already facing a steep slowdown, but at 4.5 per cent was just below analysts' expectations.
Inflation rose from 4.4 per cent in February, pushed by international energy prices, more expensive clothes as shops brought in their spring collections and the effect of having Easter in March this year, the Economy Ministry said.
Private economists were less sanguine about inflation, which has been persistently higher in Spain than in other euro zone countries for years. This reduces the chance that exports will rise and compensate for a sharp contraction in construction and falling private consumption.
In European Union-harmonised terms, inflation rose to 4.6 per cent in March from 4.4 per cent in February, meaning the differential in the inflation rate with the rest of the euro zone stayed at 1.1 percentage points.