Regional heterogeneity in recent inflation developments in Spain

Rationale Inflation has recently performed heterogeneously across Spain’s different regions. This article provides a detailed analysis of such heterogeneity and looks at some of its main determinants. Takeaways •Between June 2019 and June 2024, cumulative inflation for the Spanish economy as a whole amounted to 18.9%. •Cumulative inflation has varied appreciably across regions. Castile-La Mancha and Galicia were the regions with the highest cumulative inflation in this period (21.2% and 20.4%, respectively), while Madrid and Catalonia recorded the lowest relative price rises (17.1% and 18.1%, respectively). •Heterogeneity in regional inflation rates, something that is also seen in other European countries, has essentially reflected the cross-regional differences in the composition of household consumption baskets.