Euro Area Spanish Inflation Slightly Firmer

Economics Research 30 July 2026 | 10:20AM BST

Euro Area: Spanish Inflation Slightly Firmer; German Regional Data Broadly in Line; Nudging Down Our Euro Area Core Tracking Estimate

BOTTOM LINE: Spanish flash HICP inflation came in at 3.8%yoy in July, slightly above Katya Vashkinskaya | our and consensus expectations of 3.7%yoy, and up from 3.6% in June. Spanish core Goldman Sachs International HICP inflation was reported at 3.68%yoy, in line with our expectations, while energy inflation came in stronger than expected. Preliminary German regional CPI data released so far suggest that German headline HICP inflation would be around a weak 2.9%yoy in July, close to our (2.9%yoy) and consensus (2.8%yoy) expectations. As core pressures look somewhat weaker than we expected, we downgrade our estimate for German core HICP to a strong 2.6%yoy from 2.7%yoy previously, mostly via weaker core goods. Taking the Spanish national and German regional data into account, we keep our Euro area headline inflation forecast for July unchanged at 2.88%yoy. We revise down our Euro area core inflation forecast by 2bp to 2.44%yoy.

Spanish Headline HICP Inflation (Flash, July): 3.8%yoy, GS: 3.7%yoy, consensus: 3.7%yoy, last (June): 3.6%yoy.

1. Spanish flash HICP inflation came in at 3.81%yoy in July, slightly above our and consensus expectations of 3.7%yoy, and up from 3.6% in June. The press release noted upward pressure from “increases in the prices of fuels and lubricants for personal vehicles and of electricity” rising more than last July. Energy inflation in July printed at 9.5%yoy, above our expectations, while unprocessed food declined further to 2.3%yoy, against our expectation of a rebound. Processed food was also weaker than expected. Spanish core HICP inflation was reported at 3.68%yoy, in line with our expectations, and showed an acceleration in seasonally adjusted sequential terms to 0.40%mom in July.

2. The German flash HICP estimate for July will be released at 1pm London time today. Preliminary regional CPI data released so far (about 68% of the total German weight) suggest that German headline HICP inflation would be around a weak 2.9%yoy in July, close to our (2.9%yoy) and consensus (2.8%yoy) expectations. While energy inflation looks broadly close to expectations, food inflation, and in particular unprocessed food inflation and alcohol, appears somewhat firmer than we had penciled in. At the same time, core pressures look somewhat weaker than we expected, with package holidays printing close to our forecast but year-on-year airfares and clothing inflation surprising to the downside. We thus downgrade our estimate for German core HICP to a strong 2.6%yoy from 2.7%yoy previously, mostly via weaker core goods. The uncertainty, however, is somewhat higher than usual bearing in mind that several regional prints have not yet been released.

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3. Taking the Spanish national and German regional data into account, we keep our Euro area headline inflation forecast for July unchanged at 2.88%yoy. We revise down our Euro area core inflation forecast by 2bp to 2.44%yoy, driven by weaker-than-expected German core pressures in the regional data. We will update our Euro area inflation forecast after the German nationwide data are published later today.

Exhibit 1: July HICP Tracking Estimates

Source: Goldman Sachs Global Investment Research, Haver Analytics