Food prices rose 23% year-on-year in May, but experts warn that “the worst is yet to come” in supermarket prices.
- Inflation in Spain: The same breakfast is three times more expensive than in France, twice as much as in Italy and 30% more than in Germany
price hike In supermarket It condemns Spanish families to spend more for the same thing. in only feed -Foods and drinks purchased in shopping-, every person will spend this year 200 euro monthly average If you buy the same product as last year. For two-person families, the cost rises to 400 euros, and for large families of five, for example, 1,000 more euros will be needed.
this is the conclusion you come to Allianz Research In its latest report on Effect of Inflation on Consumption Although he cautions that still “The worst is yet to come“. The warning occurs because although price of food -cereals, vegetables, dairy products, meat or sugar- has increased a 22.8% year-on-year in May, According to data published this Friday by the Food and Agriculture Organization of the United Nations (FAOFor its acronym in English), producers have yet to pass on all this increase in their final prices.
This insurer finds that European households spend between 12% and 25% of your total consumption to make purchases in supermarket, The higher the ratio, the lower the income of each country. Seeing it Spain Eurostat ranks twenty-fifth in the average net income per household classification, assuming that It is one of the lowest income countries. Compared to the rest – the average in the Eurozone is 20,730 euros per household and in Spain it is 16,043 euros – and therefore, Spend maximum of your consumption on food.
The ratio, in turn, varies within each country, being even higher. the weakest family, This is why the poorest households tend to endure higher rates of inflation, as they devote more resources to basic necessities such as paying energy bills or buying food. “For some families, more expensive food will only affect their ability to save; for others, Meeting critical needs will be a challenge“, Allianz explains.
Food prices are rising because producers are getting higher prices. production cost -Raw material and energy-. Past experiences of high inflation show that sellers are exhausted transfer increases to 75%, Which will lead to food and beverage inflation in Spain in 2022 9,5%ie, the rise of 200 euro per person, If sellers transferred 100% of the increase, prices would increase by an average of 13% over the year. In Europe, on average, the additional cost will be 243 Euro per person.
“This rise in food prices is likely to revive a debate about Potential social benefits to reduce inflation burden on the most vulnerable households“, Allianz experts explain. In short, this is an option that has already been proposed in Spain Economic and Social Council, That last Wednesday, while presenting its annual report for 2021, it asked the government for help equal to the minimum critical income to offset the impact of price hikes on low-income households.
The government has not yet expressed itself on the possibility but has made progress that it is going to expand the share of the aid approved for contain the effects of inflation and can be included new policies.
Sellers haven’t transferred even half of the cost
As of today, the Consumer Price Index (Indian Penal Code) makes a deposit Average annual growth of 8.1%, According to data advanced by INE, prices in May rose 8.7% on a year-on-year basis. underlying inflation -which excludes the cost of energy products and fresh food and serves as a thermometer to measure the impact of the transition on the entire consumption basket- a 4.9%biggest increase since 1995,
Still, Allianz experts caution that “The worst is yet to come for European families“, because” food prices are far from reflecting the increase in raw material prices over the past 18 months. “Since the start of 2021, food and beverages in Europe have become more expensive by 14%, with a very striking increase in daily consumption products such as Oil ,+53% on average across the continent), Flour (+28%) Hailstone Pasta (+19%), Despite the fact that these raw materials have suffered this growth, supermarket labels have experienced an average 6% growth, “That means sellers haven’t even paid half of the cost increase yet.”
The rise in food prices has increased war in ukraine, On the one hand, the increase in energy prices continues their upward trend as they are accepted sanctions For Russian oil and gas, as these automatically make both energy sources more expensive. other thing, Russia and Ukraine are both grain exporting countries.Cereals, agricultural products and fertilisers, products that have been discontinued in the market, thereby increasing the cost of their substitutes and final products that use them as intermediate goods.
according to the estimate of Funkas What was already collected through this means, inflation would directly affect the pockets of households, minus Purchasing power of 16.7 billion euros in 2022, This means that if all Spaniards maintained their 2021 level of consumption this year – not only in food, but also in leisure, clothing, transport, housing costs, etc. – they would have to pay 800 euros more per person. Of these, at least an additional 200 euros will be used to meet basic vital needs.
according to the norms of