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Economy Spain's government hints at lowering grocery taxes in the face of generalised price risesSeveral departments are studying a range of economic measures amid fears of a global inflation similar to what happened with the Ukraine war in 2022
Wednesday, 4 March 2026, 16:06
TThe Spanish government has confirmed it is open to implementing new fiscal measures if escalating tensions in the Middle East begin to cripple the population's ability to afford basic groceries.
Minister of Economy Carlos Cuerpo stated that the administration is closely monitoring prices to determine if a new "inflation shield" is required to protect households.
Although for now the government rejects the need for a shock plan against inflation, Cuerpo stated that the government is monitoring prices to see if it is necessary to implement measures similar to those of 2022, at the beginning of the Russian invasion in Ukraine.
Back then, the rise in electricity prices set a record of more than 300 euros per megawatt hour (MWh) in the case of gas and 400 euros/MWh in the wholesale electricity market.
Potential tax cuts on staple foods
If the government moves forward with a new shock plan, it may mirror the 2022 'energy shield,' which included:
0% IVA (VAT) on bread, milk, eggs, and fruit
5% IVA reduction for oils and pasta
Price freezes on butane gas and a cap on natural gas prices
Fuel subsidies for professional hauliers and discounts on public transport
At the time, the government approved an 'energy shield': a zero per cent tax on bread, milk, eggs and fruit, among other staple foods; a reduction to five per cent for oils and pasta; a freeze on the price of butane; a cap on the price of gas; discounts on public transport; and fuel subsidies for professional hauliers. The cost of this aid totalled 22 billion euros.
Cuerpo said that they are also considering measures on the taxation of the electricity bill, if necessary. "As I said, we are not ruling out any type of measure," he said.
The Ministry of Economy is not the only department to react to the concern that the situation could lead to an inflationary spiral similar to the one that occurred four years ago. Minister of Agriculture, Fisheries and Food Luis Planas has announced that the government will defend "Spain's interests". At an event in Seville, he said that trade policy is a matter of the EU and that all trade issues fall within this framework.
According to Planas, Spain's exports to the US amount to 3.2 billion euros, mainly olive oil and wine. In 2025, sales abroad totalled 78 billion euros.
Deputy Prime Minister Yolanda Díaz has confirmed that the government will take the appropriate measures to mitigate the negative economic impact of the conflict. She convened social partners to discuss measures that could include a ban on war-related dismissals or the strengthening of temporary layoff schemes (ERTEs), as was done in previous crises.