National consumer prices in Spain increased by 3.1% in the 12 months through December, according to the latest data published by the National Statistics Institute (INE).

This is a fall from a 3.2% rise in November, as transportation costs declined.

The final 3.1% reading for December confirmed the flash estimate unveiled by the INE a fortnight ago and also the estimate of analysts surveyed by the Reuters news agency.

Transportation costs edged down in November by 1.2% as a result of cheaper fuels, whilst there was a slowdown in the price rises of food and non-alcoholic beverages.

"The overall annual data is good data," according to a statement by the country's Economy Minister, Carlos Cuerpo.

In addition, average inflation in Spain for 2023 declined to 3.5% from 8.4% in 2022, predominantly due to a 37% annual fall in electricity prices, the Statistics Institute went on to add.

Moreover, core inflation – which doesn't take into account volatile fresh food and energy prices – stood at 3.8% in the 12 months to December, a fall from 4.5% in the 12 months to November, INE stated. This indicator is at its lowest level since March 2022, Reuters reports.

The Statistics Institute also confirmed the 3.3% flash reading of 12-month European Union-harmonised inflation, which was also the average forecast made by analysts polled by Reuters.

Furthermore, the government announced on Friday it had reached an agreement with major unions on a 5% hike to the minimum wage.

The sixth increase under this administration would see the minimum wage rise by €54 to €1,134. However, approval is still required by the cabinet.

"Since 2018, the minimum wage has risen by 54%. It is the best tool to fight in-work poverty and for wage equality," said Prime Minister Pedro Sanchez on the social media platform X.

The rise will benefit over 2.5 million workers throughout the country, mainly women and young people, the PM added.

Nevertheless, the minimum wage increase was too large, according to the main employers' association, the CEOE.

CEOE representative Antonio Garamendi said he was in support of a 3.4%-3.5% rise but cautioned of a risk of second-round inflation, with higher wages driving up consumer prices.