Torres, Raymond

Spain’s inflation outlook in the wake of the Persian Gulf ceasefire

The ceasefire between the United States and Iran pushed oil and gas prices closer to
pre-conflict levels, easing inflationary pressures on the Spanish economy. However,
the withdrawal of fuel tax relief and persistently high services inflation mean that overall inflation will normalize more slowly than energy markets.

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The impact of the Middle East conflict on the Spanish economy

The conflict in the Middle East has renewed inflationary pressures in Spain through higher energy and commodity prices, further weakening a growth outlook already strained by rising trade tensions. Domestic demand remains strong for now, but a prolonged closure of the Strait of Hormuz would push Europe closer to recession and inevitably also weigh on the Spanish economy.

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