01.Sep .2020 11:05

Spain's consumer prices fall in August as COVID-19 affects holiday sales

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Consumer prices in Spain fell by 0.5 percent year-on-year in August, according to preliminary figures released by the Spanish Statistical Office (INE) on Monday.

The country's Consumer Price Index (CPI) has been declining for five consecutive months, since the start of the COVID-19 pandemic. The INE explained that the main reason was the slowdown in tourism.

The pandemic has significantly reduced the number of foreign tourists visiting Spain with hotels and travel companies lowering prices in an attempt to stimulate the domestic market.

Meanwhile, the prices of certain key consumer goods continued to rise.

Earlier this year, the INE has created a special "shopping basket" of goods, which includes food products, beverages, tobacco, cleaning and non-durable household items, pharmaceutical products, pet food and personal care items, to track the evolution of their prices during the crisis.

Monday's figures show that the price of a basic shopping basket of these products rose by 1.7 percent year-on-year in August. Fresh produce now costs 3.5 percent more than a year ago due partly to problems in production and supply caused by the pandemic.

This steep increase was offset somewhat by a two percent drop in the cost of housing and garage rental services, gas, heating oil, telephone and other services.