Inflation in the Canary Islands reached 4.4% in September, up 0.6% from the previous month and double the rate from a year ago. Prices remained stable compared to August, with no monthly variation. This was reported by the Santa Cruz de Tenerife Chamber of Commerce, which warned that ongoing inflationary pressures will continue to impact family consumption and business costs in the region.
Chamber President Santiago Sesé highlighted that rising fuel and energy prices are key contributing factors. Fuels increased by 4.3% last month and have risen 35% over the past year, affecting transport directly and distribution and overall economic costs indirectly. “Although prices were stable in September, we are still in a clearly inflationary environment. The annual rate surpasses 4%, highlighting the pressures on both family economies and businesses,” he said.
Different spending categories showed varied trends in September. Clothing and footwear prices rose by 10% as the autumn-winter season began, while prices for restaurants and accommodation dropped by 0.4%, and transport costs fell by 0.5%. Some leisure and cultural activities also saw a decline in prices.
These monthly changes do not alter the annual trend, as all spending categories have increased compared to September 2022, with transport prices up by 10%, correlated with rising fuel costs.
The chamber noted that the inflation dynamics uniquely affect the Canary Islands due to its island status and reliance on transport for goods and people. Rising energy costs impact the entire supply chain, potentially squeezing business margins and household purchasing power. Sesé remarked, “We need to contain energy prices in the Canaries. Higher fuel prices affect transport and subsequently impact the overall economy, raising business costs and limiting family consumption capacity.”
Core inflation, excluding unprocessed foods and energy products, decreased by 0.4% in September to stand at 2.8% annually, below the overall rate of 4.4%. This disparity suggests the significant influence of energy components on price hikes.
The chamber cautioned that the accumulated increase in goods and services continues to affect purchasing power, potentially limiting family consumption and investment by businesses, particularly small and medium-sized enterprises. “Even though core inflation is below the general index, the accumulated impact on the cost of living remains significant,” said Sesé.
Looking ahead, the chamber expects inflation to stay elevated until spring 2027, depending largely on oil prices and geopolitical uncertainties. They noted that while inflation in the Canaries is half a percentage point below the national average, the ongoing price increases are still impacting consumption and production costs.
“The future trajectory will largely depend on controlling energy prices and avoiding new international tensions that could drive fuel costs higher. The stability in September should be contextualised: prices are still rising year-on-year, and if this continues, it could reduce families’ purchasing power and limit activity for Canary businesses,” Sesé concluded.
