Sales & Subsidies Entice Spanish Shoppers

As the first day of Spain’s Rebajas Season starts, shoppers are also making savings on every-day food items thanks to the government’s €10 billion aid package to help in the fight against inflation.

The measures, which came into effect on 1 January, will last until 30 June, or until inflation falls below 5.5%.

The package is the latest anti-crisis measure introduced by the Spanish government to protect those on very low incomes and will mean a direct reduction on VAT charged on basic food items.

The Prime Minister, Pedro Sanchez, said that  for the next “ six months, we will reduce VAT on all basic foods from 4% to 0%,” and other foods such as pasta and olive oil, the tax will halve from 10 to 5%.

He added that the aim was “to protect the middle and working classes given the rise in the cost of living, energy and food”.

From 1 January the foods that will have zero rated VAT until 30 June are:

  • Bread
  • Cereals
  • Cheese
  • Eggs
  • Flour
  • Fruit
  • Legumes
  • Milk
  • Vegetables

Some supermarkets have gone even further, the French chain Carrefour launched a 30 Essentials Basket For €30 to entice shoppers.

The government also announced a new €200 payment for households earning less than €27,000 per year.

This brings some €45bn worth of state measures which came in following the Russian invasion of Ukraine to deal with its economic fallout.

Spain’s inflation rate has been reached a a thirty year high in 2022 however it is hoped this has peaked and there will be a gradual fall over 2023.

The latest forecast from the Bank of Spain shows the economy preforming well with an expected growth rate of 4.6%.




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