Spain's European Union-harmonised 12-month inflation dropped to 2.9% in February as the pace of price growth in electricity and food cooled, preliminary data from the National Statistics Institute (INE) showed on Thursday.

The figure was down from 3.5% in January and in line with the 2.9% average expectation from analysts polled by Reuters. It was the first time the rate had dipped under 3% since August 2023.

On Feb. 15, the European Commission said it expected inflation across the euro zone in 2024 to be slower than previously forecast as prospects for economic growth were muted.

Spanish Economy Minister Carlos Cuerpo said the Socialist-led coalition government had made "price moderation compatible with maintaining social measures and supporting households and families who are most in need".

Spain's headline consumer prices rose 2.8% year-on-year in February. The 12-month inflation was lower than the 3.4% rate in January, and above the 2.7% expected by analysts polled by Reuters.

INE said this was mainly due to the drop in electricity prices and food price stability.

Spain's inflation along with other major economies' in the euro zone has fallen, although they still exceed the European Central Bank's 2% target.

ECB Vice-President Luis de Guindos said on Wednesday inflation is expected to decline further but the central bank needs more data before starting to cut interest rates.

 

National inflation data for February is being published by individual euro zone countries before the EU-wide release slated for Friday, which is expected to show headline inflation slowing to 2.5% year-on-year in February from 2.8% in January. (Reporting by Jakub Olesiuk and David Latona; editing by Inti Landauro and Toby Chopra)