May CPI distances itself from rising number of agreements

In May, the CPI marks the highest level in the past year and the difference with the agreement on wage increases: wages continue to lose purchasing power

The Consumer Price Index for May confirms the growth trajectory of these months and is already the highest in the past year: 3.6%, compared to 4.1% recorded in April 2023. Since then it has not exceeded 3.5% and has even been below 3%.

A fact that confirms that wages will continue to increase the loss of purchasing power, since the percentage of wage increases under the agreement until the same month was 2.96%.

Rising prices for electricity and transport were the main factors behind the new rise in inflation.

Necessary tax reform

“And the unfinished tax reform, corrected on the basis of anti-crisis measures and partial decrees, is largely to blame for this. Home energy is a basic necessity; it cannot be taxed based on market fluctuations because it is an unfair fluctuation for families. And to this is added the threat that the prices of basic staple foods will return to their VAT rate on July 1,” warns Joaquín Pérez, Secretary General of the USO.

Also in this sense, Perez is critical of containment measures: “In essence, this is a measure whose goal we share. However, there has never been an oversight or ministry responsible for analyzing whether the VAT reduction was effective or whether it was absorbed elsewhere. The truth is that food continues to become more expensive, more expensive than before the tax cuts. And, in fact, in 2024 they, along with public catering, which they affect, are the main reason for the increase in VAT. Food prices have risen 31% since 2021 and 4.4% annually.”

All this comes amid uncertainty about whether the tax cuts will actually be extended or whether they will be stuck in Congress. “Something that, because it is not progressive, will be catastrophic for July inflation and the pockets of families,” recalls the general secretary of the USO. For this reason, he calls on all groups to “finally get the great tax reform this country needs. Without color and ideology, taxation is for citizens, for the well-being of families and for the maintenance of public services.”