Spain | What impacts will the increase in the cost of oil have?

Although historical evidence tells us that the increase in fuel prices observed over the last few months could considerably slow down recovery (by around one percentage point according to BBVA Research), there is reason to think that this time could be different.

Key points

• Key points:
• Inflation has gone from negative (-0.8%) to positive (1.3% in March), mainly because of the contribution of housing (electricity) and transport (fuel) components.
• It is likely that the increase in oil prices is largely due to a better outlook in terms of world demand. In this case, companies could compensate for the drop in margins with increased sales.
• Restrictions needed to prevent the spread of COVID-19 have forced families to limit their mobility, which has reduced their expenditure on transport.
• There are also other factors such as automation or the increase in the relevance of the logistics sector, which will make it increasingly unnecessary for people to travel to factories or shopping malls.

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